Nomura has downgraded HDFC Life Insurance Company to “Neutral” from its previous rating, with a target price of Rs 735. Despite sustained growth, the downgrade reflects concerns over weak margins and a lack of near-term triggers for the company.
In the second quarter of fiscal year 2025, HDFC Life reported individual and total Annualized Premium Equivalent (APE) growth of 31% and 27% year-on-year, respectively. However, the Value of New Business (VNB) margins declined by 200 basis points year-on-year and 70 basis points quarter-on-quarter to 24.3%. This margin contraction was primarily due to changes in the product mix and the deferment of re-pricing in certain non-participating (non-PAR) products.
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HDFC Life