HDFC Life Insurance has garnered attention from multiple brokerages, each providing differing views on the stock’s outlook. From optimistic projections to cautious downgrades, here’s a detailed roundup of what leading brokerages are saying about HDFC Life.
| Brokerage | Rating | Target Price (₹) | Key Takeaways |
|---|---|---|---|
| Jefferies | Buy | ₹850 | – VNB growth of 17% YoY in Q2FY25 – Weak VNB margin at 24% due to delayed yield-reset in non-PAR segment – Premium growth driven by ULIPs and non-PAR products |
| CLSA | Outperform | ₹805 | – 160 bps YoY decline in VNB margins in H1FY25 – New surrender value regulations expected to stabilize margins – FY25 APE growth forecast at 20%, VNB growth forecast at 12% |
| Nomura | Neutral | ₹735 | – 31% YoY individual APE growth in Q2FY25 – VNB margin decline by 200 bps YoY to 24.3% due to product mix and deferred re-pricing – Concerns over weak margins and lack of near-term triggers |
| Investec | Buy | ₹850 | – VNB growth remains the key driver, not margins – Strong growth from non-PAR savings – Expected to benefit from new surrender value regulations |
Brokerage Insights on HDFC Life:
- Jefferies: Buy, Target Price ₹850
Jefferies has maintained its “Buy” rating on HDFC Life, raising the target price to ₹850. In Q2FY25, the company posted a VNB growth of 17% year-on-year (YoY), though margins came under pressure, with the VNB margin at 24%, down due to delayed yield-reset in the non-participating (non-PAR) segment. Jefferies expects the margin issue to normalize from Q3. Premium growth was driven by ULIPs and non-PAR products, supported by a 20% growth in the HDFC Bank channel. The firm projects a 15% compound annual growth rate (CAGR) in VNB from FY24 to FY27. - CLSA: Outperform, Target Price ₹805
CLSA upgraded HDFC Life from “Hold” to “Outperform,” raising its target price to ₹805. The upgrade followed a 160 basis points YoY decline in VNB margins in the first half of FY25, driven by an increase in ULIPs and deferred re-pricing in non-PAR products. New products launched under revised surrender value regulations from October 1 are expected to stabilize margins. CLSA forecasts a 20% APE growth for FY25 but expects only 12% VNB growth due to margin uncertainties. - Nomura: Neutral, Target Price ₹735
Nomura downgraded HDFC Life to “Neutral” from its previous “Buy” rating, citing weak margins and a lack of near-term triggers. Despite strong growth in individual and total APE (up 31% and 27% YoY, respectively), the VNB margin declined by 200 basis points YoY to 24.3%, primarily due to product mix changes and the deferment of re-pricing in non-PAR products. While growth remains strong, Nomura expressed concerns over the near-term outlook. - Investec: Buy, Target Price ₹850
Investec has maintained its “Buy” rating and raised the target price to ₹850. The brokerage emphasized that VNB growth, rather than margins, is the primary value driver for HDFC Life. Growth in non-PAR savings has been a strong contributor, and the company is expected to benefit from new surrender value regulations, which are projected to drive market share gains.
Conclusion: Mixed Views on HDFC Life
Brokerages have a mixed outlook on HDFC Life, with Jefferies, CLSA, and Investec maintaining positive stances and price targets ranging from ₹805 to ₹850. However, Nomura has taken a more cautious approach, downgrading the stock to “Neutral” with a lower target of ₹735, citing concerns over margins and near-term catalysts. Investors should weigh the stock’s long-term potential, driven by ULIP and non-PAR products, against current margin pressures.
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