HDFC Life Q3FY22 Preview: 15% growth in net profit expected on 20-22% jump in new premium, analysts opine

The insurance heavyweight HDFC Life Insurance is expected to report a robust third quarter results for the financial year 2021-22 (Q3FY22) on Friday, with net premium income rising between 20-22 per cent, most of the analyst believe in their earnings preview for this company. 

According to Motilal Oswal, HDFC Life may declare almost 22 per cent rise in the net premium year-on-year basis to Rs 11,534.9 crore as compared to Rs 9487 crore registered in the same quarter a year ago. 

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Almost in the similar lines, another domestic brokerage house – ShareKhan sees the net premium during October-December rising by 20.5 per cent YoY to Rs 11432 crore. 

While the profit of the private insurer may grow over 15 per cent YoY to Rs 305 crore, as per Motilal Oswal’s estimate and almost 10 per cent YoY growth to Rs 301 crore during the quarter is expected by ShareKhan. In comparison, the company had reported Rs 265 crore as profit in Q3FY21. 

New business premium to see healthy traction on strong trends in Annuity/PAR, Motilal Oswal said in its results expectations adding further that VNB growth to remain modest, margins to moderate sequentially and Expense ratio to remain stable as well as RoEV to stay modest. 

Insurance-premium income and NBM likely to be mixed sequentially, ShareKhan mentioned in its report stating that APE growth may witness a mixed trend sequentially with stable VNB margin for our coverage companies.  

Similarly, “ULIP products may see slower recovery, while annuity products may see robust demand, however, protection demand is expected to remain moderate.”, the brokerage also said. 

The COVID-related claims will be a key monitorable during the Q3 earnings announcement, Motilal Oswal also pointed out. 

ShareKhan gives a Buy call on the stock, while seeing an upside of over 30 per cent to Rs 850 per share as target price. While Motilal Oswal gives a Neutral call and sees 15 per cent upside to Rs 750 per share as target price.