HDFC Life Insurance - Q3FY21 First Cut - ICICI Direct

(CMP - Rs. 687, MCap- Rs. 138936 crore)

Healthy growth momentum continued with improving margins.

Q3FY21 Earnings Summary

- Gross premium growth remained healthy at 20.3% YoY to Rs. 9628.21 crore, led by higher traction in renewal (up 21.5% YoY) and single premium (up 21.8% YoY). Growth in renewal premium continued to remain healthy at ~22% YoY to Rs. 4576.98 crore. New Business Premium (NBP) witnessed slight moderation at 19% YoY to Rs. 5051.23 crore, due to sluggish group business. On APE basis, growth in premiums stood at 15.9% YoY to Rs. 2100.14 crore, Individual APE for 9MFY21 stood at Rs. 4660 crore, which was up by 6% YoY. Growth in retail protection stood at 17% YoY and 42% growth in annuity.
- Commission ratio increased by 50 bps QoQ to 4.7% while opex ratio (management expense) ratio jumped from 10.8% in previous quarter to 13.6%. Net profit for the stood at Rs. 265 crore, which was up by 6% YoY but down 18.7% QoQ.

- AUM growth for the quarter stood at 21% YoY to Rs. 165623 crore. Debt to Equity mix in AUM stood at 64:36 with 98% of debt investments in G-secs and AAA bonds.

- Persistency ratio largely remained steady on sequential basis, 13th Month persistency stood at 92.9% versus 90.80% QoQ and 61st month stood at 51.8% versus 52.4% QoQ. Conservation ratio increased from 85.9% to 86.2% QoQ indicating healthy customer retention.

- New business margins continued its general upward trajectory lead by balanced product mix and it improved by ~80 bps QoQ to 26.4%, on YTD basis NBM was steady at 25.6% versus 25.9% YoY.

- Market share for the company on Individual WRP basis slightly declined on sequential basis from 17.5% to 16.4%, though on yearly basis it saw an increment.

- Solvency ratio was healthy at 2.02x as against 2.03x QoQ

Shares of HDFC Life Insurance Company Ltd was last trading in BSE at Rs.687.65 as compared to the previous close of Rs. 700.65. The total number of shares traded during the day was 169948 in over 8946 trades.

The stock hit an intraday high of Rs. 708.3 and intraday low of 684.25. The net turnover during the day was Rs. 117781926.

Source : Equity Bulls

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