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HDFC Life reported slower premium growth in Q1FY27

ICICIdirect Research 16 Jul 2026 DISCLAIMER

News: HDFC Life reported slower premium growth in Q1FY27, while margins remained largely steady, supported by a favourable product mix. Individual APE grew 7% YoY to ₹2,969 crore and total APE increased 9% YoY to ₹3,515 crore, supported by healthy group business. Growth outside the HDFC Bank channel remained strong, with the agency channel growing 21% YoY and non-bank partnerships sustaining healthy momentum, while the HDFC Bank channel remained broadly flat YoY. Product mix improved, with non-par savings at 22%, retail protection at 8% (+42% YoY growth), annuity at 11% and ULIP stable at 44%. VNB increased 9% YoY to ₹879 crore, while VNB margin remained broadly stable at 25.0%, excluding the residual GST impact, at 25.6%. Solvency improved to 185%, while 13-month persistency moderated to 84% (vs 86% Q1FY26) and 61-month persistency improved to 65% (vs 64% Q1FY26). PAT increased 12% YoY to ₹611 crore, while embedded value rose 13% YoY to ~₹65,860 crore.

View: The quarter witnessed relatively slower growth, with both APE and VNB growing in single digits. However, management expects growth momentum to improve over the remaining quarters, supported by a recovery in the HDFC Bank channel, continued strength in the agency and non-bank partnership channels, and improving traction in non-par savings and annuity. While underlying margins are expected to benefit from a favourable product mix and operating scale, the company intends to prioritise growth, with VNB margins likely to remain broadly around current levels. We believe most of the near-term negatives are largely priced in at current valuations, while an expected recovery in growth could drive a gradual uptick in price.

Impact: Neutral

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