HDFC Life Insurance shares will in focus in Thursday's session after the Nifty constituent released its October-December earnings on the previous day. For the reporting quarter, the company's net profit rose 14 per cent to Rs 415 crore while the same was recorded at Rs 365 crore during the same period last year.

COMMERCIAL BREAK
SCROLL TO CONTINUE READING

Total income at the company during the recently concluded quarter declined to Rs 16,914 crore versus Rs 26,694 crore in the same period last year.

The solvency ratio, at the insurer, as against the regulatory stipulation of 150 per cent, registered a decline during the review period to 188 per cent in comparison to 190 per cent as of December 31, 2023. The solvency ratio in the insurance industry is a metric that is used to assess the company's ability to meet its long-term financial obligations. It's a key indicator of the company's financial health.

Here's how global brokerages view HDFC Life after its Q3 results

Hong Kong-based global brokerage has maintained its 'Accumulate' call on the stock with the target slashed to Rs 690 from Rs 805. The brokerage held that the company's financial performance had been healthy, nonetheless, weak sentiment could persist owing to the chaotic regulatory landscape.

The brokerage also highlighted that the company has not released any update concerning the capping of banca mix, while the processes have been made stringent.

VNB margin at the company improved for 9MFY25 to 25.1 per cent.

HSBC also maintained 'Buy' rating on the stock with the target pegged at Rs 750 per share, implying potential gains of over 26 per cent from the last close. The brokerage pointed out that the sequential margin improvement was higher than expected in the October-December quarter. 

Furthermore, HSBC is of the view that focus on new customer acquisition as well as deepening distribution should aid growth at the insurer. Besides, going ahead, margin would improve in a rate-cut cycle as they are negatively correlated. 

Another foreign brokerage, Citi, meanwhile, has reiterated its 'Buy' stance and raised the target to Rs 835 from the earlier Rs 820 per share. 

Jefferies has also reiterated its 'Buy' call with the target pegged at Rs 750 per share. As per the brokerage, the rise in share of non-participating insurance schemes over the participating schemes has aided margins for the insurer.

Also, it poined out that the latest quarter has been better-than-expected with 9 per cent on-year increase in VNB or value of new business to Rs 900 crore. Despite softer premium growth (APE) of 12 per cent, VNB aided by better product mix, attachment of insurance & limited impact of new surrender norms, it added.