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Informist, Tuesday, Oct. 15, 2024

 

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--HDFC Life Jul-Sept net profit INR 4.33 bln
--HDFC Life: Jul-Sept net premium income INR 165.70 bln
--HDFC Life Jul-Sept net premium income INR 165.70 bln vs INR 147.56 bln
--HDFC Life Jul-Sept net profit INR 4.33 bln vs INR 3.77 bln year ago
--HDFC Life MD: Relaunched over 40 pdts contributing to 95% of business
--HDFC Life Indian embedded value INR 521.14 bln on Sept 30, up 21% on year
--HDFC Life AUM at INR 3.25 tln as on Sept 30, up 23% on year
--HDFC Life value of new business INR 16.56 bln in Apr-Sept, up 17% on year
--HDFC Life new business margin at 24.6% in Apr-Sept vs 26.2% year ago
--HDFC Life Apr-Sept net premium income INR 290.8 bln vs INR 262.4 bln yr ago
--HDFC Life Apr-Sept net profit INR 9.11 bln vs INR 7.92 bln year ago
--HDFC Life solvency ratio at 181% as on Sept 30
 

 

 

 

 

 

 

By Kabir Sharma

 

MUMBAI – A sharp rise in income from investments and steady growth in net premium income helped HDFC Life Insurance Co. Ltd report a 15% increase in its net profit for the quarter ended September to INR 4.33 billion, the company's exchange filings showed Tuesday. However, despite the steady performance, HDFC Life's shares fell by over 2% and closed 3.6% lower at INR 714.25 on the National Stock Exchange.

 

The increase in the net profit was supported by a 12% increase in the net premium income to INR 165.70 billion, while income from investments jumped 43% on year to INR 116.11 billion in the quarter ended September. Sequentially, the profit after tax was down around 9%, with investment income about 18% lower than the quarter-ago period.

 

"The private sector and overall industry continued its strong momentum in Q2 (Jul-Sept), growing in H1FY25 (Apr-Sept) by 24% and 21% respectively on an individual weighted received premium basis. We have outperformed the private sector by growing at 28% during this period and 19% on a 2 year CAGR (compound annual growth rate) basis. We registered an increase of 22% in the number of policies, which was significantly ahead of the private sector growth of 13%. We experienced secular growth trends across Tier 1, Tier 2, and Tier 3 geographies," Vibha Padalkar, managing director and chief executive officer of HDFC Life, said in a statement.

 

In terms of premiums, HDFC Life's first-year premium increased by 27% in Jul-Sept to INR 32.53 billion, while renewal premium was up 13% at INR 88.31 billion. Assets under management of the company stood at INR 3.25 trillion as on Sept 30, registering an increase of 23% in the first half of 2024-25 (Apr-Mar), while its embedded value crossed the threshold of INR 500 billion in Jul-Sept, with the return on it being 16.0%.

 

When asked about the negative stock reaction post the earnings release and whether it was due to margins being lower than the guidance, Chief Financial Officer Neeraj Shah told Informist "Unit link mix is higher than what we had same time last year. So that is resulting in some sort of dilution in the margins".

 

"Also, given that we had to make all our products available in a fairly short period of time, some of the repricing that we had to do came in with a bit of a lag. So that caused some sort of dilution in the margin profile," Shah further said. HDFC Life relaunched more than 40 products that contribute to about 95% of its business in line with revised regulations as on Oct. 1.

 

Shah further added that while the stock markets will take a call based on their own thought process, HDFC Life is very clear that its margins will be reasonably range bound and is happy with the value of new business margins around 15-17%. HDFC Life's value of new business for Apr-Sept rose 17% to INR 16.56 billion.

 

On the solvency front, HDFC Life's ratio stood at 181% at the end of September, well above the regulatory requirement of 150%. "We are very comfortable with the solvency ratio. We have approval for another 1,000 crores (INR 10 billion) of fundraising which we will do anytime in the next 3-6 months. So, solvency is not an issue for us," Shah told Informist.  End

 

Edited by Vidhi Verma

 

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