The value of its new business (VNB) is estimated at Rs 714 crore for Q1FY25, marking a 17% increase over the corresponding period of the previous financial year.
HDFC Life will be announcing its April-June quarter results on Monday, July 15.
Key areas to monitor going forward include product-level growth, especially in protection products, as well as margin guidance for APE and VNB.
In the June quarter of the last financial year, HDFC Life reported a consolidated net profit of Rs 416.7 crore, while in the previous quarter i.e. Jan-March, the profit after tax (PAT) was reported at Rs 411.6 crore.
Here’s what brokerages recommended:
Nuvama
Nuvama expects HDFC Life to report an Annual Premium Equivalent (APE) of Rs 2,910 crore for the quarter ended June 30, 2024, which is a likely 25% YoY jump, but a 38% climbdown on a QoQ basis. The company’s VNB for the reporting quarter is estimated at Rs 710 crore, a 17% YoY jump but a 42% QoQ fall.Meanwhile, the VNB margin is seen at 24.5%, down by 168 bps on a YoY basis and 161 bps on a QoQ basis.
In its view, investors will watch out for product-level growth, particularly protection. APE and VNB margin guidance for FY25E and the medium term will be the key investor focus, it said.
Kotak Equities
Kotak estimates the APE of HDFC Life in the said quarter at Rs 2,784 crore, a 19.6% YoY likely uptick, while a 41.1% QoQ fall. The VNB is seen at Rs 702 crore, a 15% YoY gain, while a 43.1% QoQ loss. VNB margin in Q1FY25 is estimated at 25.2%, down by 100 bps YoY and 91 bps on the QoQ basis.
The 20% YoY APE growth in 1QFY25 is on a low base and a 2-year APE CAGR will likely be lower at 16%, Kotak said in a note. Margin compression will be on higher volumes in low-margin ULIPs.
Yes Securities
Yes expects APE to grow at 20% YoY to Rs 2,801 crore. It will be down by 41% on the QoQ basis. The value of new business is estimated at Rs 729, higher by 19% YoY and down by 41 QoQ. New business premium (NBP) is expected to rise 13% YoY to 6,608 crore. However, this will be a 31% decline.
“We pencil in new business growth assumptions based on trends observed till May 2024, when HDFC Life had displayed NBP/APE de-growth of -23%/-35% for 2M1QFY25 (April and May 2024) over 2M4QFY24 (January and February 2024). We pencil in a VNB margin contraction of -10bps QoQ based on expected business mix changes,” Yes said in a brokerage note.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times)
