HDFC LIFE Q2 RESULTS 2024: PROFIT RISES IN DOUBLE DIGIT

HDFC Life reported its Q2FY24 numbers on Friday when the market moved between green and red. The stock price closed flat after the result announcement. Let us look at HDFC Life's quarterly numbers in detail.

About HDFC Life

HDFC Life is one of India's leading life insurance companies, providing a wide range of insurance products and services. With a strong customer-centric approach, it offers innovative solutions and has earned a reputation for reliability and trust in the insurance industry.

Crucial Parameters

• TTM PE: 93.84
• Sector PE: 17.51
• Market Cap: Rs 1,34,379.02 crore
• 52-week high: Rs 690.90

Share Price Movement

In the last month, HDFC Life's share price has fallen 3.37% despite a good rally in the benchmark indices. However, in 2023, the stock price gained 9.36%, a percent higher than the benchmark index. In the 5-year period, the share price has sub-par returns to investors of only 69%, much lower than the benchmark.

How has HDFC Life performed in Q2FY24?

Let us look at HDFC Life's September'23 results in detail:

Net Profit: HDFC Life reported a net profit of Rs 376 crore for the quarter ended September, a rise of 15% from Rs 327 crore reported in the year-ago period. The net premium income stood at Rs 14,755 crore, up 28% from Rs 11,479 crore in the year-ago quarter.

Annualized Premium Equivalent: This is a metric to standardize and compare the premium income generated from various insurance policies. It is calculated by taking the total value of regular premiums received during a specific period, plus a proportion of single premiums received during that same period. HDFC Life reported an APE of Rs 3045 crore, which is below the estimates. 

Value of New Business (VNB): VNB is an essential financial metric to assess the profitability of new businesses underwritten during a specific period. It is a measure of the present value of expected future profits from new insurance policies sold. For HDFC Life, VNB grew by 18% to Rs 610 crores from Rs 518 crores.

AUM: Assets Under Management (AUM) at the end of the September quarter stood at Rs 2.64 lakh crore and has grown at 18%. 

For other parameters, the company has disclosed the number for H1FY24 and compared it with H1FY23. We will look at them accordingly.

Solvency Ratio: The solvency ratio assesses the company's ability to meet its long-term obligations and commitments to policyholders. It is a measure of the insurer's financial strength and stability. The solvency ratio is calculated by dividing the company's available capital (capital and surplus) by its net written premiums. HDFC Life's solvency ratio reduced to 194% in H1FY24 compared to 200% in the March quarter. 

Market Share: For individual WRP (Weighted received premium, sum of first-year premium received during the year, and 10% of single premiums including top-up premium), the market share has come down to 15.7% in H1FY24 compared to 16.1% in H1FY23. On the other hand, overall new business premium has increased to 20% from 19.8%.

New product launch: HDFC Life has introduced two new products in the protection category: HDFC Life Sanchay Legacy and Click 2 Protect Elite. HDFC Life Sanchay Legacy is an industry-first whole life, return of premium protection plan with increasing life cover and is designed to cater to a middle-aged and beyond customer segment. C2P Elite caters to a more affluent customer category.  

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Management commentary: "Despite the recent budget changes that were perceived to be unfavorable for the sector, the life insurance industry has demonstrated remarkable resilience. We recorded a healthy growth of 10% in individual WRP vs 8% for the overall industry, for the half year ended September 30th, 2023. Our H1FY24 market share was 15.7% and 10.3% in the private and overall sectors, respectively. We continued to grow faster than the overall industry and be ranked among the top 3 life insurers across individual and group businesses. We saw an uptick of 10% in the number of individual policies sold, beating industry growth. We have insured more than 3 crore lives across our individual and group businesses, which represents a YoY growth of 16%.", Ms. Vibha Padalkar, MD & CEO.