HDFC Life Q2 results preview: Net profit likely to grow 13%, margin may remain steady

Private sector life insurer HDFC Life Insurance Company is scheduled to report its financial results for the July-September period on Friday, October 13. Analysts expect the company to stage a steady financial performance for the quarter with double-digit growth in net profit as well as net premium income. 

According to Zee Business research, HDFC Life Insurance Company is likely to report a standalone net profit of Rs 370 crore for the quarter ended September 30, 2023, which translates to an increase of 13.4 per cent compared with the corresponding period a year ago. The analysts estimate HDFC Life to report a standalone net premium income of Rs 14,995 crore for the second quarter of the current financial year, as against Rs 13,111 crore for the year-ago period. 

The life insurance company is widely expected to register strong growth in its new business premium—or the premium realised from new policies for a particular period—and a stable margin. 

Zee Business analysts peg the company's value of new business (VNB) margin—a key measure of a life insurance company's profitability—to come in at 27 per cent for the quarter ended September 2023 as against 27.6 per cent for the quarter ended September 2022. They expect the company's solvency ratio—which determines an insurer's ability to meet its long-term liabilities—to stand at 201 per cent for the September quarter as against 210 per cent for the year-ago period. 

The company's value of new business (VNB) is estimated to increase 7.7 per cent to Rs 806 crore and assets under management (AUM) to grow 19.1 per cent to Rs 2.43 lakh crore for the quarter ended September 2023. 

How the life insurer fared in the June quarter 

For the first quarter of the financial year 2023-24, HDFC Life Insurance Company reported a standalone net profit of Rs 415.3 crore as against a standalone net profit of Rs 360 crore for the corresponding period a year ago.

Its net premium income grew 16.6 per cent on a year-on-year basis to Rs 11,479.8 crore for the quarter ended June 30, 2023 and solvency ratio improved to 200 per cent for the June quarter from 183 per cent for the year-ago period, according to a filing. 

HDFC Life shares: Past performance 

HDFC Life shares finished the September quarter two per cent weaker, contrary to a 2.3 per cent rise in the benchmark Nifty50 index. 

As of October 11, the life insurance stock had grown 19 per cent in value in the past year as against a 16.7 per cent gain in the 50-scrip headline gauge. 

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