HDFC Life Insurance Company reported a 15% year-on-year (YoY) increase in net profit for the first quarter of fiscal year 2025, reaching Rs 479 crore. This growth was driven by significant increases in both first-year and renewal premium collections, meeting market expectation
For the April-June quarter, HDFC Life’s net premium income stood at Rs 12,548 crore, reflecting a 9% rise from Rs 11,508 crore in the same period last year. This increase underscores the company’s strong performance in attracting and retaining policyholders.
The annualised premium equivalent (APE), which measures new business written by life insurance companies, rose by 23% to Rs 2,866 crore for the quarter. Although slightly below the anticipated 24% growth, this increase highlights the company’s robust business acquisition strategies.
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HDFC Life’s value of new business (VNB), representing the present value of future profits from new business written during the quarter, increased by 18% YoY to Rs 718 crore. Despite this growth, the new business (VNB) margin contracted by 120 basis points to 25%, a figure slightly better than the market’s expectation of a 130 basis point decline.
Following the earnings announcement, HDFC Life’s shares saw a positive uptick, trading 1.6% higher at Rs 645.7 apiece on the NSE at 2.25 pm. This response from the market indicates investor confidence in the company’s continued growth and profitability.
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Despite the overall positive financial performance, there are areas of cautious optimism. The reduction in VNB margins suggests pressure on profitability, though the extent of the decline was less severe than anticipated by market analysts. The company’s ability to maintain strong premium growth while managing costs will be crucial for sustaining this performance.
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Moving forward, HDFC Life is likely to focus on further strengthening its market position through innovative products and improved customer service. The company’s strategic initiatives aimed at expanding its premium base and enhancing operational efficiency will be pivotal in navigating the competitive landscape of the insurance industry.
