HDFC Life Q1 FY27 Results: Net profit rises 12% to ₹611 crore, VNB grows 9% to ₹879 crore as protection business surges 25%

HDFC Life Insurance Company, on Wednesday, July 15, reported a 12% year-on-year rise in standalone net profit to ₹611.42 crore for the April-June quarter (Q1 FY27). In the same quarter last year, the company's profit was ₹546.46 crore. Excluding the impact of GST, underlying PAT growth for the quarter stood at 17% YoY. The private life insurer held an overall industry market share of 11.2% at the end of the quarter.

New business, measured by annualised premium equivalent (APE), grew 9% YoY - a two-year CAGR of 11% - though individual APE growth was slower at 7% YoY. Proprietary channels, led by agency and non-bank alliances, grew 17%, faster than the industry, while the bancassurance channel saw only moderate growth amid a slowdown at parent HDFC Bank.

Value of new business (VNB) rose 9% YoY to ₹879 crore. New business margin held at 25% (25.6% excluding the GST impact), against 25.1% in the same quarter last year. Retail protection grew 42% YoY, with the protection mix expanding nearly 200 basis points YoY to 8% of retail APE; including riders, protection now makes up close to 11% of the retail business. Retail sum assured grew 31% YoY, placing the company among the top two players on this metric, while credit protect grew close to 20%.

Assets under management (AUM) grew 13% YoY to ₹4,00,870 crore; including the AUM of wholly-owned subsidiary HDFC Pension Fund Management, the combined figure crossed ₹5.7 lakh crore for the first time. Embedded value (EV) stood at ₹65,860 crore, with rolling operating return on embedded value (RoEV) at 14.7%.

HDFC Life Q1 FY27 Results: Management Commentary

"In Q1FY27, while our proprietary channels led by agency and non-bank alliances channels grew by 17%, faster than the industry, business through our bancassurance channel saw moderate growth this quarter resulting in individual APE growth of 7%," said Vibha Padalkar, MD & CEO, HDFC Life. "Growth during the quarter was underpinned by strong customer acquisition, with the number of policies growing in double digits and ahead of industry. Our product mix also continued to improve, with non-participating savings crossing 25% of individual APE on a run-rate basis. Retail protection grew 42% this quarter, retail sum assured grew 31% and credit protect grew close to 20%," she added.

"New business margin for the quarter was 25%; excluding the impact of GST, the margin would have been 25.6% compared to 25.1% in the same period last year. We crossed an important milestone during the quarter with assets under management crossing ₹4 lakh crore. Excluding GST impact, underlying PAT growth for the quarter stood at 17%," said Niraj Shah, ED and CFO, HDFC Life.

HDFC Life Q1 FY27 Results: Kotak Neo Research View

Kotak Neo Research retained its BUY rating on HDFC Life, revising its fair value to ₹820 - implying an upside of roughly 44% over the current market price of ₹569.

The headline print was viewed as weak: VNB growth of 9% in Q1 FY27 tracked broadly similar APE growth, weighed down by muted 6% growth in the savings business. Bancassurance grew just 2% YoY on a slowdown at the parent bank, though the rest of the business - agency and other proprietary channels - grew 17% YoY. It expects traction at HDFC Bank to improve over the coming months, and that the ongoing protection rally is cushioning margins even as clarity on savings-product strategy remains limited.

On the positives, the report noted 25% YoY growth in the protection business, with individual protection up 43% YoY, and roughly 20% YoY growth in the agency channel - an area where the company has stepped up investment. It also noted the company's guidance for industry-level growth this year, implying scope for market share gains, and pointed to PAT growth of 11% YoY (17% ex-GST) to ₹610 crore aided by 15% YoY growth in underwriting profits.

On the negatives, the report flagged prolonged weakness at HDFC Bank, and any management changes at the bank, as a continuing risk to the stock.

Looking ahead, Kotak Neo Research pencilled in 17% VNB CAGR over FY26-29E, with medium-term RoEV of 15-16%.

HDFC Life Share Price

Shares of HDFC Life Insurance Company turned lower in early trade on Thursday, July 16, after initially rising more than 2% at the open, as investors booked profits despite a Q1 print that beat Street expectations on value creation. The results were announced after market hours on Wednesday, July 15.

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