Business insurance

HDFC Life Stock Price: Buy HDFC Life Insurance Company, Target Price Rs 756 : ICICI Securities

ICICI Securities has bought a call option on HDFC Life Insurance Company with a target price of Rs 756. The current market price of HDFC Life Insurance Company is Rs 583.9. The period given by the analyst is one year when the price of HDFC Life Insurance Company Ltd. can achieve the set goal.

HDFC Life Insurance Company Ltd., incorporated in 2000, is a large capitalization company (having a market capitalization of Rs 122457.97 Crore) operating in the financial services sector.

The main products/revenue segments of HDFC Life Insurance Company Ltd. include the amount transferred from the policyholder’s account, interest, dividends and rents and profit/loss on the sale/redemption of investments for the year ending March 31, 2021.


For the quarter ended 31-03-2022, the company reported a consolidated total revenue of Rs 17,856.00 Crore, up 23.91% from last quarter, a total revenue of Rs 14,410.36 Crore and in down -12.54% compared to the same quarter last year. Total revenue of Rs 20415.12 Crore. The company reported a net profit after tax of Rs 506.19 Crore last quarter.

Investment rationale
HDFC Life results in Q4FY22 were verified against most metrics, starting with VNB growth (28% for FY22), VNB margin (27.4% for FY22 and 29.4% for Q4FY22), the short and medium term outlook on margins/volumes. Lower variances and sensitivity also stand out. The brokerage continues to believe that a balanced product mix and distribution channel, combined with the track record of execution, provides a strong conviction of maintaining the VNB CAGR above 20% for the firm. It maintains BUY with a target price of Rs756 (unchanged) based on FY24E EV of Rs411bn, 30x (earlier 35x) FY24 new business of Rs38bn (Rs33.2bn FY23 earlier) and adds Rs27 per share of Exide Life based of 1.5x FY24E EV from Rs5.7bn.

Promoter/Fii Holdings
The promoters held 51.53% of the company’s capital as of March 31, 2022, while the FIIs held 26.65% and the DIIs 7.47%.

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