HDFC Life Insurance - Q3FY22 First Cut - ICICI Direct

(CMP - Rs. 644, MCap - Rs. 135906 crore)

HDFC Life reported a mixed performance wherein premium growth remained healthy with balanced product mix leading to steady margins. However, a decline in income from investment led to flattish bottomline.

Q3FY22 Earnings Summary

• Gross premium growth remained healthy at 27% YoY to Rs. 12255 crore, led by healthy traction in renewal at Rs. 5543 crore (up 21% YoY) and new business premium at Rs. 6712 crore (up 33% YoY). On APE basis, premiums increased 20.4% YoY to Rs. 2576 crore. Individual APE for Q3FY22 stood at Rs. 2150 crore, which was up by ~18% YoY. Growth in protection APE for 9MFY22 witnessed robust traction with 34% YoY growth to Rs. 923 crore (attributable to pick up in credit disbursement)
• On APE basis, individual business mix reported at 26 / 30 / 33 / 6 / 5 in Ulip / Par / Non Par / Term / Annuity for 9MFY22
• Commission ratio decreased by ~ 50 bps YoY and 30 bps QoQ to 4.2%. Opex ratio (management expense) ratio increased ~70 bps QoQ to 12.3%
• In 9MFY22, HDFC Life settled around 3 lakh claims. Gross and net claims amounted to Rs. 4,657 crore (Rs. 3640 crore in H1FY22) and Rs. 3,406 crore (Rs. 2,466 crore in H1FY22) respectively. PAT for the quarter was at Rs. 274 crore, up 3% YoY, and lower than our estimate, mainly due to decline in income from investment, partially offset by lower actuarial liabilities
• New business margins continued to remain healthy at 26.5% in 9MFY22
• AUM was at Rs. 1,94,738 crore, up 18% YoY. Debt to Equity mix in AUM was at 64:36 with ~98% of debt investments in G-secs and AAA bonds
• Persistency ratio largely remained buoyant with 13th month persistency at 85% and 61st month persistency at 51%
• Market share for the company on Individual WRP and Total New business basis continued to remain buoyant at 15.2% and 21.7% respectively for 9MFY22
• Indian Embedded Value stood at Rs. 29,543 crore as of December 2021, up 18% YoY. Solvency ratio was healthy at 1.90x

We would be shortly coming out with a detailed report.

Shares of HDFC Life Insurance Company Limited was last trading in BSE at Rs. 641.25 as compared to the previous close of Rs. 650.05. The total number of shares traded during the day was 450553 in over 13002 trades.

The stock hit an intraday high of Rs. 646.25 and intraday low of 633.60. The net turnover during the day was Rs. 287432543.00.

Source : Equity Bulls

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