CLSA has upgraded HDFC Life to “Outperform” and increased its target price to Rs 805. The upgrade follows HDFC Life’s report of a 160 basis points year-on-year decline in VNB margins in the first half of fiscal year 2025, driven by a shift towards ULIPs and deferred re-pricing of non-PAR products.
New products under revised surrender value regulations launched on October 1 are expected to stabilize the situation within a quarter. HDFC Life has projected an 18-20% APE growth and 15-17% VNB growth for FY25.
Given the strong 23% year-on-year growth in the first half, CLSA has lifted its FY25 APE growth forecast to 20%, but expects only a 12% VNB growth due to limited clarity on margins.
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HDFC Life