Table of Contents
1. Inventory Outlook
The present market value of the inventory is Rs 564.85 apiece. The inventory has touched a 52-week excessive of Rs 775.65 apiece and 52-week low of Rs 497.05 apiece. In at this time’s commerce the inventory witnessed a dip of 1.65%. In line with Sharekhan, if traders purchase the inventory at its present market value of Rs 565, it could actually doubtlessly give a return of 31% with a goal value of Rs 740 apiece.
2. HDFC Life registers strong gross premium development
HDFC Life reported strong gross premium development of 19% yoy aided by well being development in particular person and group companies. Its particular person new enterprise premium grew by 16% yoy to Rs. 11,640 crore. The corporate witnessed an upswing within the financial savings enterprise on a sequential foundation regardless of the pandemic. The non-participating section witnessed a 16% development pushed by the launch of latest merchandise and continued momentum within the annuity enterprise whereas the unit-linked section grew by 29%.
Additional, group new enterprise rose by 25% yoy to Rs. 12,515 crore primarily led by group credit score shield and annuity enterprise. The rise in credit score life enterprise in the course of the yr is according to a rise in credit score disbursement. Its renewal premium grew by 18% yoy on the again of upper new enterprise development enchancment in persistency. The thirteenth month persistency improved from 85% to 87%.
3. Favourite Product Combine
The corporate has witnessed wholesome development within the premium primarily pushed by numerous and modern merchandise and a multi-channel strategy. The product portfolio consists of 39 retail and 13 group merchandise, together with 7 rider advantages protecting the financial savings, funding, safety and retirement wants of the purchasers.
It launched quite a few merchandise to fulfill the varied buyer wants corresponding to Sanchay FMP in Non-PAR financial savings, a daily pay deferred Annuity plan, and a Time period variant with riders protecting the 3Ds of loss of life, illness, and incapacity. In FY2022, the corporate continued to keep up a balanced and worthwhile product combine, with non-par financial savings at 33%, taking part merchandise at 30%, ULIPs at 26%, particular person safety at 6% and annuity at 5%, primarily based on particular person APE . The corporate witnessed enchancment in margins aided by a greater product profile. For FY2022, its VNB margin stood at 27.4% versus 26.1% in FY2021.
Key Dangers: Slowdown in enterprise operations could impression premium development. Any adversarial insurance policies/tips could adversely impression its profitability.
4. Valuation
In line with Sharekhan, “We preserve Purchase with an unchanged PT of Rs. 740: HDFC Life trades at 3x/2.5x its FY2023E/FY2024E EVPS. We consider valuations are affordable, because it has a well-diversified product bouquet (no section contributing) to greater than 30% of APE), best-in-class branding, and robust metrics. We consider the corporate is nicely positioned to ship sturdy and sustainable long-term APE development. Owing to sturdy fundamentals (strong stability sheet and constant profitability) and excessive long-term development potential for the Indian insurance coverage business normally and HDFC Life, particularly, we discover it to be a sexy long-term guess. We preserve our Purchase score on the inventory with an unchanged value goal (PT) of Rs. 740.”
5. About HDFC Life
Established in 2000, HDFC Life is a number one long-term life insurance coverage options supplier in India, providing a variety of particular person and group insurance coverage options that meet numerous buyer wants corresponding to Safety, Pension, Financial savings, Funding, Annuity and Well being. As on September 30, 2021, the Firm had 38 particular person and 13 group merchandise in its portfolio, together with 7 non-obligatory rider advantages, catering to a various vary of buyer wants. The market capitalization is Rs 119,362 crore.
Disclaimer
The above inventory was picked up from the brokerage report of Sharekhan. Investing in equities poses a danger of economic losses. Traders should subsequently train due warning. Greynium Info Applied sciences, the writer, and the brokerage home aren’t responsible for any losses precipitated because of choices primarily based on the article.