HDFC Life Q3FY25 Preview: PAT to soar 20%, VNB margin to likely get impacted

Nifty50 constituent entity HDFC Life is scheduled to release its December quarter earnnings on Wednesday (January 15). The private sector company is expected to stage a positive performance, on the back of continued growth momentum in new business premium.

Zee Business research expects standalone profit after tax (PAT) at the insurer to soar 20 per cent year-on-year (YoY) to Rs 430 crore during the review quarter as against Rs 365 crore during the same quarter last year.

For the reporting quarter, the private insurer is expected to post gross premium of Rs 18,210 crore, marking a riseof 17 per cent over the corresponding period a year ago. The same stood at Rs 15,530 crore in Q3FY24.

Furthermore, analysts estimate the company's December-quarter new business annual premium equivalent (APE) at Rs 3,870 crore, up 21 per cent on a year-on-year basis, in comparison to Rs 3,190 crore in the same quarter of the previous year. 

New business annual premium equivalent (APE) is a metric used in the insurance industry for measuring the growth of new business sales.

Estimates on HDFC Life's operational performance in Q3FY25

HDFC Life's value of new business (VNB) margin -a gauge of profitability—is expected to come in at 25 per cent,  instead of 26.8 per cent a year ago, according to Zee Business research.  As per analysts new norms pertaining to surrender value will weigh on the company's margins.

HDFC Life share price performance

In the last one year, the stock has yielded a negative return of over 6 per cent in comparison  to Nifty50's rise of as much as 5.8 per cent during the same period.