HDFC Life Q2

HDFC Life showed healthy growth in the first half of FY24

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HDFC Life currently closed in trading at Rs. 630.05 which is 0.77 per cent up from the yesterday’s close.

The company declared their 2nd quarter results recently on 13th October, 2023. The profit increased by 14.95 per cent Year on Year. However, as compared to the last quarter the profit declined by 9.24 per cent and revenue was down by 0.87 per cent.

When there were changes made in the Union Budget, they were expected to be unfavourable for the Insurance sector. However, HDFC Life had reasonable growth in premium in the first half of FY24.

In the total premium of the company, they saw a 14 per cent rise Year on Year. They got a premium of 26, 613 Crore in H1 FY24 as compared to 23, 332 Crore in H1 FY23. The Profit After Tax was Rs 792 Crore which is significantly higher than Rs 686 Crore of H1 of FY23. The individual annualised premium equivalent (APE) grew by 9 per cent year on year.

The product mix of the company was great. ULIP constitute 24 per cent, protection constitute 17 per cent, etc. You can see all of it in the image down below.

Well, the valuation of the company is quite high in the share market, but, I think long term structural growth can be seen. The average PE ratio of the share price is 91.98 which is signicantly higher than the sector PE of 17.46.

I will not buy it but Company could do great in the future when it comes to the Insurance business.

I think, in India, awareness is required when it comes to Insurance. Because, there is a huge population which does not believe in the Insurance products. I can see a huge untapped market in India when it comes to doing insurance business.

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Saifullah Khan

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