Buy HDFC Standard Life Insurance Company, target Rs 525: Motilal Oswal Securities

Motilal Oswal Securities has a buy call on HDFC Standard Life Insurance Company with a target price of Rs 525.

The current market price of HDFC Standard Life Insurance Company is Rs 478.

Time period given by the brokerage is one year when HDFC Standard Life Insurance Company price can reach the defined target.


"HDFCLIFE reported operating RoEV and RoE of 18.4% and 31%, respectively, while embedded value increased to INR156.9b (+19% YoY). We expect HDFCLIFE to deliver a 24.1% CAGR in new business APE over FY18-20, while margins are likely to sustain at current levels of ~24%. We, thus, estimate 27% CAGR in VNB over FY18-20, while RoEV is expected to sustain at ~18.7%. We value HDFCLIFE at INR525 per share, which corresponds to 4.9x FY20E EV. While near-term upside appears limited, we believe that huge under-penetration and HDFCLIFE’s strong positioning in the sector will enable it to deliver healthy returns in the long term. Maintain Buy," Motilal Oswal Securities said in a report.