Buy HDFC Life Insurance Company, target price Rs 690: Emkay Global

Emkay Global has buy call on HDFC Life Insurance Company with a target price of Rs 690. The current market price of HDFC Life Insurance Company is Rs 597.95. Time period given by analyst is one year when HDFC Life Insurance Company Ltd. price can reach defined target.

HDFC Life Insurance Company Ltd., incorporated in the year 2000, is a Large Cap company (having a market cap of Rs 127010.66 Crore) operating in Financial Services sector.

HDFC Life Insurance Company Ltd. key Products/Revenue Segments include Amount transferred from Policyholder Account, Interest, Dividend & Rent and Profit/Loss on Sale/Redemption of Investments for the year ending 31-Mar-2021.



Financials
For the quarter ended 31-03-2022, the company reported a Consolidated Total Income of Rs 17856.00 Crore, up 23.91 % from last quarter Total Income of Rs 14410.36 Crore and down -12.54 % from last year same quarter Total Income of Rs 20415.12 Crore. Company reported net profit after tax of Rs 506.19 Crore in latest quarter.

Investment Rationale
On a YoY basis, HDFC LIFE delivered RWRP growth of 30% in YTDFY23 (vs. 70% growth for private sector). However, this comes on a relatively stronger base of YTDFY22. On a 3Y basis, a 9.4% RWRP CAGR in YTDFY23 for HDFC LIFE looks poor vs. 14.6% for the private sector. But Apr-May of 2019 saw exorbitant growth for HDFCLIFE, driven by bumper sales of its non-par product “Sanchay Plus”. In the near term, it is to be seen how growth will play out for the merged entity of HDFCLIFE and Exide Life and how the merger of HDFCHDFC Bank will affect HDFCLIFE’s growth.

Promoter/FII Holdings
Promoters held 51.53 per cent stake in the company as of 31-Mar-2022, while FIIs owned 26.65 per cent, DIIs 7.47 per cent.