HDFC Life Insurance Company Ltd - Stock Valuation and Financial Performance

BSE: 540777 | NSE: HDFCLIFE | Insurance | Large Cap

HDFC Life Insurance Share Price

618.80 -16.55 -2.60%
as on 11-Feb'25 16:59

DeciZen - make an informed investing decision on HDFC Life Insurance

Overall Rating
Bole Toh

1. Quality

2. Valuation

Undervalued

3. Price Trend

Semi Strong

HDFC Life Insurance Company stock performance -

mw4me loader
P/E Ratio (CD):
76.25
Market Cap:
1,33,215.4 Cr.
52-wk low:
511.1
52-wk high:
761

Is HDFC Life Insurance Company Ltd an attractive stock to invest in?

1. Is HDFC Life Insurance Company Ltd a good quality company?

Past 10 year's financial track record analysis by Moneyworks4me indicates that HDFC Life Insurance Company Ltd is a good quality company.

2. Is HDFC Life Insurance Company Ltd undervalued or overvalued?

The key valuation ratios of HDFC Life Insurance Company Ltd's currently when compared to its past seem to suggest it is in the Undervalued zone.

3. Is HDFC Life Insurance Company Ltd a good buy now?

The Price Trend analysis by MoneyWorks4Me indicates it is Semi Strong which suggest that the price of HDFC Life Insurance Company Ltd is likely to Rise-somewhat in the short term. However, please check the rating on Quality and Valuation before investing.

10 Year X-Ray of HDFC Life Insurance:

Analysis of Financial Track Record

Data adjusted to bonus, split, extra-ordinary income, rights issue and change in financial year end
Data adjusted to bonus, split, extra-ordinary income, rights issue and change in financial year end

Data adjusted to bonus, split, extra-ordinary income, rights issue and change in financial year end.

Financial track record gives insight into the company's performance on key parameters over the past ten years. MoneyWorks4me’s proprietary colour codes make it easy for retail investors to gauge the company’s past performance.
HDFC Life Insurance Company Ltd has performed well in majority of the past ten years indicating its past ten year financial track record is very good

Value Creation

Value Creation Index Colour Code Guide

Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20Mar'21Mar'22Mar'23Mar'24TTM
ROCE % 36%29.3%26.2%26.5%25%20.8%16.9%10.4%8.5%10.8%-
Value Creation
Index
2.21.61.31.41.20.90.5-0.1-0.20.0-

Growth Parameters

Growth Parameters Colour Code Guide

Sales 00000000000
Sales YoY Gr.-NANANANANANANANANA-
Adj EPS 3.94.14.45.56.36.46.76.36.47.38.1
YoY Gr.-3.8%8.6%23.9%15.1%1.6%4.7%-6.7%1.4%14.9%-
BVPS (₹) 12.815.81923.42834.641.773.560.366.173.4
Adj Net
Profit
7868178871,1071,2781,2971,3611,3271,3681,5741,748
Cash Flow from Ops. 4,4595,6876,2306,7399,8687,3889,7035,9436,88310,721-
Debt/CF from Ops. 0000000.10.10.10.1-

CAGR

CAGR Colour Code Guide

9 Years 5 Years 3 Years 1 Years
Sales NANANANA
Adj EPS 7.1%3%2.8%14.9%
BVPS20.1%18.8%16.6%9.5%
Share Price - 1.4% 1.3% 7.1%

Key Financial Parameters

Performance Ratio Colour Code Guide

Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20Mar'21Mar'22Mar'23Mar'24TTM
Return on
Equity %
051.125.426.124.720.517.611.19.611.6-
Op. Profit
Mgn %
0000000000-
Net Profit
Mgn %
0000000000-
Debt to
Equity
0000000.100.10.1-
Working Cap
Days
00000000000
Cash Conv.
Cycle
0000000000-4

Recent Performance Summary

Return on Equity has increased versus last 3 years average to 11.60%

Sales growth has been subdued in last 3 years 0.00%

Net Profit has been subdued in last 3 years 2.84%

Sales growth is not so good in last 4 quarters at 9.25%

Latest Financials - HDFC Life Insurance Company Ltd.

Standalone Consolidated
TTM EPS (₹) 8.1 8.1
TTM Sales (₹ Cr.) 66,339 66,528
BVPS (₹.) 73.3 73.4
Reserves (₹ Cr.) 13,624 13,654
P/BV 8.44 8.43
PE 76.68 76.25
From the Market
52 Week Low / High (₹) 511.10 / 760.95
All Time Low / High (₹) 307.65 / 775.65
Market Cap (₹ Cr.) 1,33,215
Equity (₹ Cr.) 2,152.8
Face Value (₹) 10
Industry PE 18.6

Management X-Ray of HDFC Life Insurance:

Shareholding Pattern

Promoter's Holding & Share Pledging

Pledged *0.000.000.000.000.000.000.000.000.000.00
* Pledged shares as % of Promoter's holding (%)

Event Update

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Analyst's Notes

HDFC Life Insurance: Q4FY23 Result Update - 28 Apr 2023

Robust growth momentum in gross premium to Rs 196bn in Q4; NBP market share climbs to 22.9%

Q4 retail APE (+27% YoY) was led by strong growth in high ticket non-par policies (35% of total Q4 APE/ 12% of FY23 APE) in March. APE stood at Rs 133.4bn at end-FY23, of which 85% or Rs 114bn comprised individual APE. APE grew 37% YoY in FY23 whereas individual APE grew 40%.VNB margin of 27.6% for FY23 includes Exide Life numbers.

PAT grew by 13% to Rs 1,360 Cr; with back book growing by a robust 27% offset by new business strain. Embedded Value stood at 39527 Cr as on 31 Mar 2023 with an operating return on embedded value of 19.7% for the year.

Good results driven by strong Annual premium equivalent (APE) growth.

 

HDFC Life Insurance Company Ltd – Q2FY23 Results - 29 Nov 2022

Market Cap 125,400 Cr

CMP 584
P/E 95.3

Check 10 year X-ray here

Results

(INR Cr)

YoY Growth

Comments

Net Premium Income

13,110

14.5%

Driven by premium increase in first & renewal segment

Profit After Tax (PAT)

326

18.9%

New business margins improved by 1.2% to 27.6% in H1FY23

Key Highlights –

·        Total Annual Premium Equivalent (APE) grew by 10.6%, while

·        Solvency Ratio improved by 20% to 210% in H1FY23 (190% in H1FY22).

·        Exide Life Insurance merger completed on 14 October 2022.

·        Market share on Individual weighted premium received at 16.1% (merged entity) in private insurance players. 10.2% within industry.

Management Outlook-

·        Management guided on APE growth to around 15-17% and margin neutrality in new business segment.

·        Company has increased rates on non-par and annuity offering due to increase in interest rates.

HDFC Life: Inorganic route to growth - 06 Sep 2021

Event Update: HDFC Life acquires Exide Life Insurance

HDFC Life acquired Exide Life Insurance for Rs. 6,700 Cr based on market value of HDFC Life’s shares, of which Rs. 725 Cr will be paid out in cash and the rest in equity shares of HDFC Life.

Rationale for acquisition:

  • To penetrate in south India where Exide life has large presence.
  • To leverage Exide’s agency channel and sell HDFC Life’s products.

Synergy?

HDFC Life can scale up existing distribution of Exide Life by adding new products and higher sales leading to better margin in Exide Life’s arm. Insurance business’ core advantage is distribution which is already present with HDFC Life. To grow the business HDFC Life is following an inorganic route just like HDFC Mutual Fund did in past when it acquired Zurich, Morgan Stanley funds.

 

HDFC Life: Result Snapshot - 21 Jul 2021

HDFC Life Insurance Company | Market Cap: 1,15,280 Cr

CMP 671 | Price to VNB ~47x TTM

Recommendation | Sell Partially/Hold

Results: HDFC Life reported 27% growth in APE (Annual premium) over same quarter last year. New business value growth was 40.7%, on low base.

Key highlights:
  • Individual APE growth was 16% while group APE growth of 4%. HDFC Life is second largest private insurer after SBI Life in terms of APE market share.

  • Total premium was up 70% (large component of renewal premiums) versus same quarter in previous year.
  • New business margin was robust 26% vs sub 25% in previous years. Embedded value growth was 21% year on year.

MoneyWorks4me Opinion: HDFC Life continues to be the fastest growing Life Insurance company thanks to aggressive expansion through banking channels. Higher share of high margin products and cost control helps it clock better profitability. We are optimistic on private sector Life insurance as we expect high demand for term protection post-Covid as well as savings products due to fall in fixed income returns pushing savers to lock-in current interest rates.

We have recommended BUY on SBI Life Insurance. It has higher market share, equally competitive and better valuation. So far ICICI Pru Life and SBI Life have been outperforming HDFC Life in stock performance as HDFC Life trades at elevated prices.

HDFC Life: Quarterly Result Update - 21 Oct 2020

HDFC Life Insurance Company | Market Cap: 1,15,280 Cr

CMP 571 | Price to VNB ~47x TTM

Recommendation | Sell Partially

 

Results: HDFC Life reported growth of ~35% in its net premium income and growth of 47% in its total new business premium.

Click here to check 10 Year X-ray of HDFC Life

Key Highlights:

  • The company reported improvement in APE growth of 25% largely from group premium, while ULIPs remained weak during the quarter due to volatility in equity market.
  • VNB^ margins improved to 25.6% led by rise in retail Protection/Annuity business and cost control. HDFC Life has the highest share of VNB margin due to higher share of group and protection business.
  • The share of banca (banks) channel in individual APE increased to 60% while the share of agents declined 2% year on year to 13% over 1HFY21.
  • PAR business has become 35% of overall premium which is risky as it .

Outlook: As per the management, HDFC Life is reflecting better business trends in the retail protection and annuity segment. The Banca channel is posting strong trends in the Sanchay Par advantage however, credit life remains under pressure. On the cost front, the pick-up in business volumes will be complimented by increase in variable cost.

Moneyworks4me Opinion: HDFC Life is focused on maintaining a balanced product mix across the Savings/Protection businesses, with emphasis customer service and product innovation. In the near term, Individual Protection/PAR segments are likely to see healthy growth and trends in ULIPs could remain sluggish.

VNB margins have been broadly stable over the past few quarters; however, as retail Protection and Annuity mix improves, there is a scope for margin expansion.

Insurance business is complicated just like banking business. One can’t analyse them simply on P&L statement. One has to learn about each product, its profitability and balance sheet ratios which are different than conventional manufacturing business.

Insurance products:

Insurance companies have broadly 4 products

  1. group protection business i.e. business from its partners when they underwrite personal/business loans, they ask customers to buy insurance policy
  2. individual protection business i.e. term life direct and indirect (small part of ulip/endowment premium is also term insurance)
  3. PAR, i.e. participating policies, Policyholders (PH) receive share of profits in pool of premium invested in assets
  4. Non-PAR i.e. non participating, PH earn fixed returns, eg annuity, etc.

Risks and advantages of each product:

  1. PAR earns lower margin but better persistency due to reasonable returns earned by PH.
  2. Term life (incl group protection) has the highest margin but lower persistency. PH skips paying term premium to save his expenses in bad times
  3. Non-PAR have good margin but risky in falling interest rate environment fixed return has to be given to PH.
  4. ULIP have lower margin and lower consistency due to volatile market return.

Valuation

Insurance companies are valued as [EmV + P/VNB or DCF of Value of New business]. Use of P/EmV is not a right way to value an insurance company but can be used only for reference versus other peers.

EmV : Embedded value is a sum of all future premium to be received from existing policies. This can be take as fixed component of a valuation.

VNB : This is sum of future premium of this year’s policies (using same persistency and profit assumption). This has to be estimated for the future and added to EmV.

Our estimate of VNB growth in HDFC Life is ~20% CAGR, while in SBI and Max Financial is ~12-14% CAGR. We may change the growth rate if we see change in business prospects due to i) better distribution leading to volume growth ii) more traction in high margin term life insurance product due to the event of pandemic.

* APE – Annual premium equivalent (APE) is a measure used for comparison of life insurance revenue by normalising the policy premiums into the equivalent of regular annual payments.

** PAR - Par policies are insurance policies that participate or share in the profits of the insurance company. Apart from the guaranteed benefits, they also provide non-guaranteed benefits.

^VNB- VNB Margin indicates the profit margin of Life Insurance Company. VBN margin is calculated by dividing the Value of New Business by Annualized Premium Equivalent.

 

HDFC Life: 10 Year X-Ray - 29 Sep 2020

Key Ratios of HDFC Life Insurance

Adj EPS (Rs.)

Sales (Cr.)

ROE (%)

ROCE (%)

Profit And Loss

(All Figures are in Crores.)
PARTICULARSMar'15Mar'16Mar'17Mar'18Mar'19Mar'20Mar'21Mar'22Mar'23Mar'24
Income From Investments2031712302844144466508137241,007
Other Income 01112340413199359
Expenses23257829576269114152169
Profit Before Tax8058339091,1251,2911,3141,3541,3031,2821,570
Tax 191722181316-7-24-86-4
Adjustments 0000000000
Net Profit 7868178871,1071,2781,2971,3611,3271,3681,574
Adjusted EPS (₹)3.94000000000
Dividend Payout Ratio (%)18%0%0%0%0%0%0%0%0%0%

Balance Sheet

(All Figures are in Crores.)
PARTICULARSMar'15Mar'16Mar'17Mar'18Mar'19Mar'20Mar'21Mar'22Mar'23Mar'24

Equity and Liabilities

Share Capital 1,9951,9951,9982,0122,0172,0192,0212,1132,1492,151
Reserve and Surplus5981,2001,7962,6923,6284,9746,40913,41310,82112,065
Fair Value A/C-2-413230-3-1922078520451
Borrowings 0000000000
Policy Holders Fund 61543986221,112502,5552,2771,9766,026
Funds For Appropriations4647058679591,1038839911,3451,2351,211
Total Liabilities 67,31674,04091,2741,05,8321,24,8971,27,2341,73,1212,23,7872,39,7012,93,845

Assets

Investment0000000000
Loans126934819802994241,2721,5851,897
Total Net block 3963853373363243223275,964352393
Total Assets 67,31674,04091,2741,05,8321,24,8971,27,2341,73,1212,23,7872,39,7012,93,845

Cash Flow

(All Figures are in Crores.)
PARTICULARSMar'15Mar'16Mar'17Mar'18Mar'19Mar'20Mar'21Mar'22Mar'23Mar'24
Cash Flow From Operating Activity 4,4595,6876,2306,7399,8687,3889,7035,9436,88310,721
PBT 0000000000
Adjustment 4,8576,1576,8147,46910,8028,30410,5627,15411,24213,714
Changes in Working Capital -4824-910-38122-24-2692
Tax Paid -350-494-575-741-896-918-881-1,188-4,332-3,084
Cash Flow From Investing Activity -3,514-3,959-5,175-4,421-10,182-7,807-8,946-807-10,087-13,617
Capex -108-33-48-33-43-37-60-56-86-134
Net Investments -6,191-7,390-9,205-9,147-15,704-13,860-17,102-10,442-23,079-29,505
Others 2,7853,4654,0774,7595,5666,0908,2169,69113,07816,023
Cash Flow From Financing Activity -168-212-236-196-33738678-2381,985-403
Net Proceeds from Shares 04291326038782102,03474
Net Proceeds from Borrowing 0000000000
Interest Paid 0-216-2640000-448-399-477
Dividend Paid -14000-273-39600000
Others -2800-560060003500
Net Cash Flow 7771,5168192,122-651-3811,4354,897-1,219-3,299
PARTICULARSMar'15Mar'16Mar'17Mar'18Mar'19Mar'20Mar'21Mar'22Mar'23Mar'24
Ratios
ROE (%)
ROCE (%)
Asset Turnover Ratio0.250.230.230.240.250.260.250.240.250.23
PAT to CFO Conversion(x)5.676.967.026.097.725.77.134.485.036.81
Working Capital Days
Receivable Days0000000000
Inventory Days0000000000
Payable Days0000000000

HDFC Life Insurance Company Ltd Stock News

HDFC Life Insurance Company Ltd FAQs

Company share prices are keep on changing according to the market conditions. The closing price of HDFC Life Insurance on 11-Feb-2025 16:59 is ₹618.8.
Market capitalization or market cap is determined by multiplying the current market price of a company's shares with the total number of shares outstanding. As of 11-Feb-2025 16:59 the market cap of HDFC Life Insurance stood at ₹1,33,215.4.
The latest P/E ratio of HDFC Life Insurance as of 11-Feb-2025 16:59 is 76.68.
The latest P/B ratio of HDFC Life Insurance as of 11-Feb-2025 16:59 is 8.44.
The 52-week high of HDFC Life Insurance is ₹761.0 and the 52-week low is ₹511.1.
The TTM revenue is Trailing Twelve Months sales. The TTM revenue/sales of HDFC Life Insurance is ₹66,339 ( Cr.) .

About HDFC Life Insurance Company Ltd

HDFC Life Insurance Company Ltd. (formerly HDFC Standard Life Insurance Company Limited) (‘HDFC Life’ / ‘Company’) is a joint venture between HDFC Ltd., India’s leading housing finance institution and Standard Life Aberdeen, a global investment Company. The company was incorporated in Mumbai on August 14, 2000 as HDFC Standard Life Insurance Company Limited a public limited company under the Companies Act, 1956. The company obtained a certificate of commencement of business on October 12, 2000 and the certificate of registration from the Insurance Regulatory and Development Authority of India (IRDAI) to undertake life insurance business on October 23, 2000. It is a leading life insurance solutions provider in India, offering innovative protection, pension, savings, investment, annuity and health solutions to customers.

HDFC Life Insurance Company has the list of products for progressive employers and groups who wish to provide the best and most innovative benefit solutions to their employees or members. It offers different products for different needs of groups ranging from group term insurance plans for pure protection, Savings Solutions for employees/members, Credit Life to cover the borrowers of an organization to voluntary funded plans such as gratuity and leave encashment. Registered Office of the company is Lodha Excelus, 13th Floor, Apollo Mills Compound, N.M. Joshi Marg, Mahalaxmi, Mumbai 400 011.

Business area of the economy

It is one of the leading life insurance companies in India.  It offers a large range of life insurance plans such as term insurance plan, women's plan, health insurance plans, pension plans for retirement planning, child education plans, ULIPs, saving and investment plans. It sells policies through a multi channel network. This includes direct sales through own branches, Insurance agents, Partner Banks and through other financial institutions. The company has a broad, diversified product portfolio covering five principal segments across the individual and group categories, namely participating, non-participating protection term, non-participating protection health, other non participating and unit-linked insurance products. The company’s wide product suite caters to specific needs of customers during each stage of their lives. It also provides the company with the flexibility to operate successfully across business cycles, work with diverse sets of distribution partners and serve a range of consumers from mass market to high net worth individuals. It also provides the company with the flexibility to adapt to changes in the regulatory landscape and mitigate concentration risk in respect of particular categories or types of products.

Certifications, awards and accreditations

  • 2011: Golden Peacock HR Excellence Award.
  • 2012: Won Porter Prize for leveraging unique activities.
  • 2012: Won National Award for Excellence in Cost Management, awarded by the Institute of Cost Accountants of India.
  • 2013: Won National Award for Excellence in Cost Management for second consecutive year.
  • 2013: Recognized by Celent as Model Insurer Asia of the Year.
  • 2014: PCQuest Best IT Implementation Award for Qlik Insights BI Development - Project with Maximum Business Impact.
  • 2015: Indian Insurance Awards: Won Life Insurance Company of the Year, awarded by Fintelekt.
  • 2015: Financial Services Marketing Summit Awards - Most Customer Responsive Insurance Company of the Year.
  • 2016: ICAI Awards - Gold Shield for Excellence in Financial Reporting for the Annual Report.
  • 2016: The Indian Insurance Awards for Best Product Innovation (Life Insurance) by Fintelekt.
  • 2016: Finnoviti award to recognize and reward innovations in Banking, Financial Services and Insurance (BFSI) - Received for Cancer Care, a first of its kind standalone cancer care product from a life insurer.
  • 2017: India's Best Companies to Work For - The India's Best Companies to Work for study is conducted by The Economic Times & Great Place To Work Institute.
  • 2019: It won the ‘Platinum’ at the LACP Vision Awards for the 2018-19 Annual Report. The Report was ranked 22nd amongst the top 100 reports worldwide and adjudged the ‘Most Creative’ Annual Report globally.
  • 2019: It was awarded the ‘ICAI Silver Award’ for excellence in Financial Reporting for its Annual Report 2018-19 in the Life Insurance category
  • 2020: Its Business Insights team received the award for ‘Best Use of Data Analytics in Business Intelligence’ at The Customer Fest Awards 2020.
  • 2020: its Swabhimaan initiatives received the YUVA Unstoppable ‘Change Maker Award
  • 2020’ from the Minister of State for Finance & Corporate Affairs-GOI.
  • 2020: It received the award for ‘iEARN and LMS’ in the BFSI category at the FINNOVITI 2020 Conference & Awards.
  • 2020: It won the Gold & Bronze at the Campaign Media 360 Awards 2020 for the ‘JioSaavn Kahani Express’ campaign in the ‘Branded Content’ and ‘Media Partnerships’ category respectively.

Major events and milestones

  • 2001: First private life insurer to obtain registration from the IRDAI.
  • 2003: Crossed 100,000 policies and 10,000 individual agents; distribution tie-ups with HDFC Bank and other banks.
  • 2004: Launch of unit linked funds; distribution tie-up with Saraswat Co-operative Bank Limited.
  • 2007: Crossed the 500,000 policy milestone.
  • 2010: AUM crossed Rs 200,000 million.
  • 2011: Incorporated its Subsidiary, HDFC Pension on June 20, 2011.
  • 2012: The company turned profitable, and registered a profit of Rs 2,710 million and the total premium for the year crossed Rs 100,000 million.
  • 2014: The company’s AUM crossed Rs 500,000 million; dividend was declared for the first time in December, 2013.
  • 2016: Total premium crossed the Rs 160,000 million mark.
  • 2016: The company’s Subsidiary, HDFC International was authorised by Dubai Financial Services Authority to carry on financial services.
  • 2016: Standard Life Mauritius increased its stake from 26% to 35%.
  • 2018: The company’s AUM crossed Rs 1,000,000 million.
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