Morgan Stanley has maintained its ‘Overweight’ call on HDFC Life, with a target price of ₹840, citing a steady performance in Q1FY26 and an optimistic medium-term growth outlook.
The company reported a VNB margin of 25.1%, which was broadly in line with expectations and flat versus the same period last year. Morgan Stanley said the quality of results was solid, and reaffirmed its 17% VNB growth forecast for FY26, although the brokerage believes much of this growth is likely to be back-ended.
Despite no significant surprises in the quarter, HDFC Life’s business fundamentals remain robust. Management noted that the margin range is expected to remain stable, a reflection of the company’s focus on pricing discipline and high-margin product segments.
Valuation, however, remains at the higher end. The stock trades at 18x FY27E Price/VNB and 2.2x Price/EV, metrics that assume continued leadership in product innovation and cost efficiency.
Overall, Morgan Stanley continues to view HDFC Life as a high-quality structural play on India’s underpenetrated life insurance market, especially with rising formalisation of the economy and increasing household financial awareness.
