16 Jul , 2026 By : Debdeep Gupta
Shares of HDFC Life Insurance Company Ltd gained nearly 2 percent to emerge as the top gainer on Nifty 50 in early trade on Thursday after the private life insurer reported fiscal first quarter results that exceeded Street expectations on value creation. Brokerage Nomura upgraded the stock to 'Buy', citing better-than-expected margins and attractive valuations.
HDFC Life shares rose as much as 2.2 percent to Rs 580 in early trade. The stock had closed at Rs 567.20 on Wednesday, up 2.16 percent ahead of the earnings announcement, but remains down 24.4 percent so far in 2026.
The insurer delivered a resilient performance for the April-June quarter, with value of new business (VNB) rising 8.5 percent year-on-year to Rs 879 crore, ahead of the CNBC-TV18 poll estimate of Rs 842 crore. VNB margin remained steady at 25 percent, comfortably above the Street expectation of 24.3 percent, reflecting continued focus on profitability despite changes in the tax regime.
Annualised Premium Equivalent (APE) increased 8.8 percent year-on-year to Rs 3,515 crore, ahead of estimates, while retail APE rose 6.9 percent to Rs 2,969 crore. New business premium grew 12 percent to Rs 8,143 crore, broadly in line with expectations. Profit after tax increased 12 percent to Rs 611 crore, while assets under management crossed Rs 4 lakh crore during the quarter.
Management said the company continued to benefit from a value-focused product mix and healthy traction in its protection business. Chief Financial Officer Niraj Shah said VNB margin would have been 25.6 percent, compared with 25.1 percent a year earlier, after excluding the impact of GST. Underlying profit growth, excluding the GST impact, stood at 17 percent during the quarter.
Following the results, Nomura upgraded HDFC Life to 'Buy', and raised its target price to Rs 730, implying an upside of about 29 percent from Wednesday's closing price.
The brokerage said the company delivered a VNB margin beat of around 100 basis points, while the GST-related drag on profitability is likely to persist for one more quarter. It expects HDFC Life to deliver 12 percent APE growth and 14 percent VNB growth in FY27.
Nomura said that the insurer's bancassurance channel remains weak, although trends in the agency channel are improving. It said the better product mix and resilient profitability provide confidence in earnings growth, while the stock's current valuation offers an attractive entry point despite a moderate growth outlook.
0 Comment