• Home
  • Opinion
  • Politics
  • World
  • Business
  • Science & Tech
Wednesday, May 25, 2022
No Result
View All Result
SUBSCRIBE
The Outlooker
27 °c
Delhi
  • Home
  • Opinion
  • Politics
  • World
  • Business
  • Science & Tech
  • Home
  • Opinion
  • Politics
  • World
  • Business
  • Science & Tech
No Result
View All Result
The Outlooker
No Result
View All Result
  • National
  • Politics
  • Opinion
  • Business
  • Science
  • World
  • Health
Home Business

Maintain ‘buy’ on HDFC Life with price target of Rs 800

by The Outlooker Web Desk
December 1, 2020
in Business
0
Maintain ‘buy’ on HDFC Life with price target of Rs 800
1.8k
SHARES
12.9k
VIEWS
Share on FacebookShare on Twitter

It has also forged distribution partnerships with Yes Bank and SBI Securities.

We hosted Niraj Shah (CFO) for investor calls where he sounded optimistic about growth in premiums and sustaining margins near FY20-levels. FY22 can see margins expand with better scale and mix. A key negative is that mortality experience has been slightly worse than the past, but the company has reserves for that; guaranteed-return book is well hedged. Medium-term focus will be to scale up agency and maintain balanced mix of premiums and channel-contribution.

We maintain ‘buy’ on the stock with a price target of Rs 800 based on September ‘22 PEV of 5.0x. Optimism about growth stems from strong trends in recent months and stronger non-ULIP business. HDFC Life has been outperforming peers on growth (retail premiums APE) with 45% YoY rise in October and 8% YTD. Early entry in non-ULIP segments and ramp up of distribution platform have supported this growth; protection is also growing well. In terms of premium, for FY21, management expects high single-digit growth with mid-teens growth in FY22. In term of VNB margins, FY21 margin will likely be similar to FY20 while margin expansion in FY22 should drive ~20% VNB growth.

Mortality claims worsening; reserving in FY20 will cover for it. Management stated that claims on protection side had gone higher than expectations due to a combination of Covid-linked deaths and lagged filing of normal claims. Still, this should not have a material impact on margins as the company had made some buffer provision in FY20 itself.

Focus on non-bancassurance channels needs to backed by variablisation of costs. Over the medium-term, the company is looking to increase the contribution from its agency channel from 13-14% of premiums currently to 25%. While this will reduce dependence on bancassurance partnership, it will also need to variablise agency — costs, otherwise earnings could be more cyclical.

It has also forged distribution partnerships with Yes Bank and SBI Securities.

Indian insurers better placed to manage hedges on guarantee risks: Management reiterated that its guaranteed return book was hedged for interest rate and cashflow risks. Interestingly, management highlighted that three key reasons made Indian insurers better placed to hedge such exposures. India has a larger supply of long-term bonds from the government yield curve, is steeper than most countries and access to FRA-type of derivative contracts help to hedge better.

‘Buy’ stays. We see 18% CAGR in premiums over FY20-23 to drive 17% CAGR in VNB and ROEV of 18% in FY22.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

The Outlooker is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

The Outlooker Web Desk

The Outlooker Web Desk

Next Post
India’s COVID-19 Cases Crosses 94 Lakh-Mark

India's COVID-19 Cases Crosses 94 Lakh-Mark

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Delhi Positivity Rate Falls To 13% From 16.3%, Cases Down 19% To 9,197
National

Coronavirus India LIVE Updates, Coronavirus Cases Today, COVID 19 Cases In India, Omicron Covid Cases, India Covid Cases May 25

May 25, 2022
Global Markets: Stocks slump on growth concerns, bond yields slip
Business

Global Markets: Stocks slump on growth concerns, bond yields slip

May 24, 2022
Tamil Nadu BJP Leader Balachandran Hacked To Death In Chennai: Police
National

Tamil Nadu BJP Leader Balachandran Hacked To Death In Chennai: Police

May 24, 2022
Coal India To Open Big, New Mine This Year To Fight Power Crisis
National

Coal India To Open Big, New Mine This Year To Fight Power Crisis

May 24, 2022

Connect with us

No Result
View All Result

Archives

  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020

Category

  • Artistic
  • Business
  • Crypto
  • Design
  • Entertainment
  • Fashion
  • featured
  • Food
  • Gaming
  • Health
  • Human
  • Lifestyle
  • Movie
  • Music
  • National
  • Opinion
  • Politics
  • Science
  • Spaces
  • Sports
  • Tech
  • Travel
  • Uncategorized
  • World

Recent Posts

  • Coronavirus India LIVE Updates, Coronavirus Cases Today, COVID 19 Cases In India, Omicron Covid Cases, India Covid Cases May 25
  • Global Markets: Stocks slump on growth concerns, bond yields slip
  • Tamil Nadu BJP Leader Balachandran Hacked To Death In Chennai: Police

About Us

The Outlooker

The Outlooker is your source of authentic, hand-picked news, stories, analysis from India & the World.

  • Terms Of Service
  • Privacy Policy
  • About us
  • Submit your story
  • Contact

© 2019-2021 The Outlooker. All rights reserved.

No Result
View All Result
  • Home
  • Politics
  • World
  • Business
  • Science
  • National
  • Entertainment
  • Gaming
  • Movie
  • Music
  • Sports
  • Fashion
  • Lifestyle
  • Travel
  • Tech
  • Health
  • Food

© 2019-2021 The Outlooker. All rights reserved.