The insurer had reported a net profit of Rs 318 crore the same period a year ago. Sequentially, the bottomline is seen rising 17.8 per cent, Sharekhan said in a report.
HDFC Life Insurance will report earnings for Jan-March on Tuesday.
In the quarter ended December 31, 2021, the firm’s standalone net profit rose 3.2 per cent to Rs 273.65 crore from Rs 264.99 crore in the corresponding quarter last year. The profit had fallen well short of street estimates.
YES Securities sees HDFC Life’s new business premium (NBP) rising 9 per cent year-on-year to Rs 7,180.7 crore in the period under review. Sequentially, the new business profit is seen clocking a rise of 7 per cent.
The brokerage estimates the insurance company’s annual premium equivalent at Rs 2,946.1 crore in Jan-March, registering a rise of 2 per cent year-on-year and 13 per cent quarter-on-quarter.
Meanwhile, the value of new business for HDFC Life is estimated at Rs 771.9 crore in the fourth quarter of the previous financial year, up 35 per cent year-on-year and 14 per cent sequentially.
“We pencil in new business growth assumptions based on trends observed till February 2022, when HDFCLIFE had displayed NBP/APE growth of 5%/12.1% for 2M4QFY22 (January and February 2022) over 2M3QFY22 (October and November 2021). We pencil in APE margin expanding slightly on sequential basis based on business mix aspects,” YES Securities wrote.
For the period under review, Sharekhan sees net premium income at Rs 14,412 crore, which would mark a 12 per cent on-year rise and a 26.1 per cent rise sequentially.
Sharekhan has a ‘buy’ recommendation on HDFC Life’s stock with a target price of Rs 850. The counter closed at Rs 540.25 on the BSE on Monday, 2.5 per cent lower than previous close.
“APE growth modest on a higher base. ULIP and Non-Per Segment is likely to be muted. VNB growth is expected to remain modest. Margin is also likely to be moderate,” Sharekhan said.
HDFC Life gained market share in the fiscal year ended March 2022 even as some others like Max Life and
Life lost market share in terms of total sum assured.
HDFC Life gained 80 bps in terms of total sum assured during the last fiscal year.
Overall, private sector life insurers clocked an 11 per cent year-on-year growth in their total annualized premium equivalent (APE) in March 2022, translating into 21 per cent growth in the fiscal ended March 2022.
Their sum assured grew 17 per cent year-on-year in FY22 led by sharp increase in group sum assured (24% YoY) vs individual sum assured (3 per cent YoY). APE is the sum of the regular annualized premium from the new business plus 10% of the first single premium in a given period. It is a common measure of ascertaining the sales in the life insurance industry.
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