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- 20 Jan 2023
- ICICIdirect Research
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WEAKER PERFORMANCE ON PREMIUM ACCRETION DURING QUARTER - HDFC LIFE LATEST QUARTERLY RESULT
HDFCLIFE - 742 Change: 6.65 (0.90 %)HDFC Life – Q3FY23 First Cut
(CMP - Rs 600, MCap - Rs 1,28,929 crore)
Q3FY23 Earnings Summary
Exide Life merger completed on October 14, 2022 and numbers are restated. Hence YoY and QoQ numbers are not comparable
On a post-merger basis, new business premium grew at slower pace at 9.6% YoY at Rs 18713 crore in 9MFY23 and new business margin stood at 26.5% in 9MFY23 vs. 26.2% in H1FY23. Individual WRP market share declined by 30 bps YoY to 15.8%
Total APE (post-merger) registered healthy growth of 21.8% YoY at Rs 8174 crore for 9MFY23.
Non-par saving products now form 39% vs 37% in H1FY23 and 33% in 9MFY22. Annuity business contributes 6% while protection business contributes 4% of premium in 9MFY23.
Opex ratio increased ~250 bps YoY from 12.2% to 14.7%, led by merger. However, on merged basis, opex ratio has remained steady at 14.7% sequentially
AUM was at Rs 233839 crore, up 20.1% YoY. Debt to equity mix in AUM was at 68:32 with ~99% of debt investments in G-secs and AAA bonds. On merged basis, AUM has increased 4% QoQ.
Persistency ratio remains steady with 13th month persistency at 87% and 61st month persistency at 52% respectively
Indian embedded value was at Rs 37702 crore as of Dec 2022, up 27.6% YoY. On merged basis, Indian embedded value has risen 4.7% QoQ. Solvency ratio was at 2.1x
View: Slower accretion in business remains overhang. However, given under-penetration and focus of HDFC Life on diversified mix and VNB margin bodes confidence. Synergy benefit from Exide Life to be watched.
Impact: Neutral