Capitaline

Results 22-Oct-22

Analysis

HDFC Life Insurance Company

Maintains steady performance

HDFC Life Insurance Company, on consolidated basis, has posted 19% growth net profit to Rs 329.02 crore in the quarter ended September 2022. The figure includes number for recently acquired Exide life insurance Company effective from 01 January 2022. The company has continued to maintain a steady growth trajectory, growing by 11% in terms of total APE in H1FY23 on a pre-merger basis i.e. excluding Exide Life. The growth is in line with the industry and faster than listed peers this quarter which also led to market share improvement from 14.6% in Q1 to 15.0% in Q2 on a pre-merger basis.

The company has maintained our market leadership position as a top three life insurer across individual and group businesses. Market share in terms of individual WRP for the merged entity i.e. including Exide Life stands at 16.1% amongst private players and 10.2% within overall industry.

New business margin for H1 is 27.6%, up from 26.4% in H1FY22, on a pre-merger basis. There has been margin expansion for both the existing business i.e. pre-merger and the acquired Exide Life business in H1FY23.

The company is close to achieving aspiration of maintaining FY22-margin neutrality for the combined entity, having delivered 26.2% NBM, compared to 26.4% in H1FY22. The value of new business has grown by 16% on a pre-merger basis and is at Rs 1258 crore for H1.

The pre-merger embedded value is Rs 33015 crore, with an operating return on embedded value of 17.7% for H1FY23. The embedded value of the merged entity is Rs 36016 crore.

Profit after tax on premerger basis stood at Rs 682 crore, a YoY increase of 18% during H1FY23. This was aided by strong growth of 35% in existing business surplus.

AUM of the company increased to Rs 224901 crore on merged entity basis from Rs 204170 crore end March 2022 and Rs 191212 crore end September 2022. The AUM on pre-merger basis stood at Rs 204392 crore end September 2022.

The consolidated Networth stood at Rs 122283 crore end September 2022, while the solvency ratio of the company was at 210% end September 2022.

Embedded Value per share stood at Rs 167.6 per share at end September 2022.

Financial Performance H1FY2023:

HDFC Life Insurance Company has posted 27% increase in the net profit to Rs 690.42 crore on consolidated basis in H1FY2023. Total Premium increased to Rs 23332 crore in H1FY2023, aided by new business premium of Rs 11325 crore and renewal premium of Rs 12007 crore. Value of New Business was Rs 1288 crore and new business margin stood at 26.2% in H1FY2023.

HDFC Life Insurance Company: Results Consolidated Policyholders Account
	2209 (3)	2109 (3)	Var %	2209 (6)	2109 (6)	Var %	2203 (12)	2103 (12)	Var %
Premium earned (net)	13137.89	11468.03		23007.96	19028.72		46800.95	38194.20
Income from Investments	9784.22	8874.85		6483.10	15839.93		19511.80	32683.86
Other income	65.16	45.02		124.75	66.78		192.31	183.39
Contribution from the Shareholders` account	14.91	114.53		23.15	195.04		554.44	258.56
Total Income	23002.18	20502.43		29638.96	35130.47		67059.50	71320.01
Commission	682.96	511.19		1083.62	814.15		2007.75	1712.45
Op. expenses related to Insurance business	1842.20	1352.13		3402.61	2305.51		5852.98	4593.33
Others	99.06	51.85		209.83	-64.37		117.58	168.21
Benefits paid (Net)	11756.77	8370.63		19053.60	14207.81		32616.32	22630.17
Change in valuation of policy liabilities	8348.36	10038.42		5391.86	17665.37		25237.00	40842.33
Provision for taxation	24.37	13.95		39.21	12.14		184.50	274.39
Total Expense	22753.72	20338.17		29180.73	34940.61		66016.13	70220.88
PAT	248.46	164.26		458.23	189.86		1043.37	1099.13
Transfer to Shareholders` account	219.60	202.32		470.19	293.61		1105.72	991.58

HDFC Life Insurance Company: Results Consolidated Shareholders Account
	2209 (3)	2109 (3)	Var %	2209 (6)	2109 (6)	Var %	2203 (12)	2103 (12)	Var %
Amounts transferred from Policyholders` account	219.60	202.32		470.19	293.61		1105.72	991.58
Income from investments	160.88	205.05		282.05	464.90		813.10	649.97
Others	6.97	4.54		13.03	8.43		19.01	3.10
Total income	387.45	411.91		765.27	766.94		1937.83	1644.65
Expenses (apart from Insurance)	43.18	27.95		72.46	45.81		113.96	69.12
Contribution to policyholders account	14.91	114.53		23.15	195.04		554.44	258.56
Others	-1.18	-8.63		-23.90	-26.12		-33.32	-37.31
Total Expenses	56.91	133.85		71.71	214.73		635.08	290.37
PBT	330.54	278.06		693.56	552.21		1302.75	1354.28
Tax	1.52	2.16		3.14	6.76		-24.18	-6.59
PAT	329.02	275.90		690.42	545.45		1326.93	1360.87
EPS (Rs)*	6.1	5.1		4.3	3.4		6.2	6.3
EV/Share (Rs)	167.6	-		167.6	-		156.0
* on current equity of Rs 2149.1 crore of face value of Rs 10 each
PL: Profit to Loss, LP: Loss to Profit $ Figures for 2209 (3), 2209 (9) and 2203 (12) includes figures for Exide Life Insurance Company and are not comparable with earlier periods
Figures in crore, Source: Capitaline Database

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