Jefferies maintains a ‘Buy’ rating on HDFC Life with a target price of ₹750, citing better-than-expected Q3FY25 results. The company’s Value of New Business (VNB) rose 9% year-on-year to ₹930 crore, supported by an improved product mix and limited impact from new surrender norms, which only caused a 30 basis point margin reduction. While Annualized Premium Equivalent (APE) growth came in softer at 12% year-on-year, the attachment of insurance products provided additional support to VNB.
Jefferies noted that while the regulatory landscape, particularly regarding banca norms, remains uncertain, clarity on this front will be critical for growth visibility and potential re-rating. Overall, the brokerage remains optimistic about HDFC Life’s execution and product strategy.
HDFC Life Q3FY25 Results:
HDFC Life reported a solid Q3FY25 performance. Total APE grew by 11.9% year-on-year to ₹3,569 crore, while Retail APE rose 12% to ₹3,122 crore. VNB increased by 8.6% to ₹930 crore, supported by a better product mix. However, VNB margins contracted slightly to 26.1% compared to 26.8% in the same period last year, primarily due to the impact of new surrender norms, which limited the sequential margin decline to 30 basis points.
The company maintained its FY25 growth guidance and continues to focus on expanding its customer base and deepening distribution channels.
