- 16 Jan 2025
- ICICI Securities
HDFC LIFE DELIVERED HEALTHY GROWTH IN NEW BUSINESS PREMIUM ACCRETION
News: HDFC Life delivered healthy growth in new business premium accretion at 11% YoY to ₹22,396 crore for 9MFY25, driven by a balanced product mix and a 15% increase in the number of policies sold. Annualized Premium Equivalent (APE) growth stood at 24% YoY to ₹8,986 crore, gaining market share with private sector individual WRP market share rising to 15.3%. However, higher expenses (~120 bps increase in opex ratio at 20.8%) moderated earnings growth at 15% YoY, resulting in PAT of ₹1,326 crore. Value of New Business (VNB) grew by 14% YoY to ₹2,586 crore, although the VNB margin contracted by ~140 basis points to 25.1%. Sequential revival was witnessed in margins owing to higher growth in non-par products, restructuring of commission structure and product repricing. AUM expanded to ₹3,30,000 crore, registering an 18% YoY growth, while embedded value increased by 18% YoY to ₹53,246 crore.
Views: While growth remained slower owing to regulatory headwinds, HDFC Life witnessed increased market share and remains confident in achieving its full-year guidance of 18-20% APE growth and ~15% VNB growth. Continued focus on balanced business mix and enhancing reach in tier 2 and 3 cities is seen to aid growth. No formal communication on banca business from regulator, however, diversification of distribution remains underway.
Impact: Positive