Jefferies has maintained its “Buy” rating on HDFC Life and raised the target price to Rs 850. In Q2, HDFC Life reported a VNB of Rs 9.4 billion, up 17% year-on-year, aligning with estimates. However, the VNB margin at 24% was slightly weak due to a delayed yield-reset in the non-PAR segment, impacting the margin by 100 basis points, expected to normalize from Q3.
Premium growth was driven by ULIPs and a rebound in non-PAR products, with the HDFC Bank channel growing by over 20%.
Jefferies anticipates a manageable impact on margins from new norms and improved competitive intensity, projecting a 15% CAGR in VNB over FY24-27 despite a slight trim in VNB estimates.
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HDFC Life