HDFC Life Q1 profit surges 15%; AUM up 22% at ₹3 lakh cr
Insurance major HDFC Life Insurance Ltd reported a 15% rise in net profit at ₹478 crore for the April-June quarter of FY 2024-25. The company's private market share expanded from 16.4% in Q1FY24 to 17.1% in Q1FY25, and the overall market share in individual weighted received premium (WRP) increased to 11.4%.
The life insurance company says it achieved 46% growth in the said quarter, bolstered by a higher sum assured multiples for savings products and strong rider attachment, and aided by 28% growth in retail protection. In Q1 FY25, the company's assets under management (AUM) surpassed ₹3 lakh crore, with 22% growth. It also declared the highest ever bonus of ₹3,722 crore, to more than 22 lakh par policyholders. "...registered a strong increase in the number of policies and witnessed an expansion in ticket size as well," says HDFC Bank subsidiary.
“Growth resurgence was experienced in Tier 1 markets whilst maintaining strong growth in Tier 2 and 3 geographies, which continue to account for a significant portion of the business,” the company adds.
In its exchange filing, HDFC Life MD & CEO Vibha Padalkar says: “We have started the year on a strong note, achieving 31% YoY growth in individual APE, which implies a two-year CAGR of 21%. This robust growth is driven by a comprehensive performance across all metrics. We welcome the positive impact of IRDAI's progressive reforms that are expected to significantly strengthen the life insurance proposition in India, making it simpler, more transparent and ultimately more attractive to prospective customers.”
The company says its unit linked insurance plans accounted for 38%, non-par savings for 35%, participating products for 16%, term for 6%, and annuities for 5%, based on individual annual premium equivalent (APE). The ULIP mix was initially elevated but moderated during the quarter with the launch of products across other categories. Its non-par products bounced back in the said quarter, clocking a 41% YoY increase. The company’s value of the new business (VNB) stood at ₹718 crore in Q1, reflecting 18% growth both YoY and on a two-year CAGR basis.
“The substantial gap in financial protection across India presents a compelling growth opportunity for the life insurance sector.”
The share of HDFC Life Insurance Company closed 0.35% up at ₹637.85 on the BSE today, which is 10% lower than its 52-week high on December 12, 2024. At the current market share, HDFC Life's m-cap stands at ₹1,37,200.22 crore. Brokerage Motilal Oswal, in its this month report, has raised the target price on HDFC Life to ₹700 from ₹590 earlier.
"New business premium to see steady growth, driven by annuity/non-PAR segments and retail protection. Expect VNB growth to remain healthy, while margins to remain flat QoQ. Credit life to see healthy traction as disbursement momentum remains strong across lending institutions. Improvement in persistency ratio and commentary on growth outlook are key monitorables."