CLSA initiates coverage on HDFC Standard Life with 'buy'

CLSA has initiated coverage on HDFC Standard Life Insurance Company with a 'buy' rating and a target price of Rs 455.

The brokerage said HDFC Standard Life is set to benefit from domestic expansion and market share gains due to its wide distribution network and innovative product suite.

"We expect a 24 per cent Cagr in new premiums over FY17-20 and scope for margin expansion which will drive an 18 per cent Cagr in embedded value," said CLSA.


The brokerage said that HDFC Standard Life deserves a premium valuation to peers, given its higher profitability and ROEV.

"We expect the company to maintain an operating ROEV of about 20 per cent which will support an 18 per cent Cagr in embedded value (EV) over FY17-20," said CLSA.