HDFC Life shares surged as much as 9% on Thursday, January 16, after the company reported December quarter results that were below expectations.
The company’s annual premium equivalent (APE) grew 12% to ₹3,488 crore, higher than the CNBC-TV178 poll’s estimate of ₹3,051 crore.
Retail APE also rose 12% to ₹3,122 crore, higher than the poll’s estimate of ₹3,051 crore.
Value of new business surpassed expectations of ₹869 crore, rising 9% to ₹930 crore.
VNB margin declined 74 basis points to 26.06%, but was above expectations of 24.92%.
Brokerage firm HSBC has a “buy” rating on the stock and a price target of ₹750.
The brokerage said margins have eased as the incremental mix shift towards lower margin linked products will slow, improving sales of credit security and ahead of a potential rate cut cycle.
HDFC Life has also maintained its growth guidance for the full fiscal year.
Jefferies also has a “buy” rating on HDFC Life with a price target of ₹750.
The brokerage said improved product mix, attachment of insurance and limited impact of new surrender norms helped VNB.
Jefferies said clarity on bancassurance norms will be key to growth and re-rating visibility.
CLSA has an “outperform” rating on HDFC Life but cut its price target on the stock to ₹690 from ₹805 earlier.
It called the results a good financial performance amid a cluttered regulatory landscape.
Of the 35 analysts covering HDFC Life, 30 have a “buy” rating on the stock, while the other five have a “hold” rating. There are no “sell” recommendations on the stock.
Shares of HDFC Life traded 9.1% higher at ₹ 648.5 on Thursday. By Wednesday’s close, the stock was down 21% from its peak.
