HDFC Life shares rise 2% post Q1 results. Should you buy, sell or hold?
HDFC Life Insurance Company reports a strong Q1FY25 with a 15% YoY growth in net profit. Brokerages maintain buy ratings with target prices ranging from Rs 765 to Rs 819. The company faces challenges but remains optimistic about future growth.
Shares of on Tuesday rose nearly 2% to the day’s high of Rs 648 on BSE after reporting a 15% year-on-year (YoY) growth in its standalone net profit at Rs 477 crore for the quarter ended June 2024.The net premium income during the April-June 2024 period increased by 9% YoY to Rs 12,510 crore. It was Rs 11,480 crore in the corresponding period of the previous year.
The company’s VNB also increased by 18% YoY to Rs 718 crore from Rs 610 crore in the same quarter last year.
Here is how brokerages viewed the update:
Goldman Sachs: Buy | Target price: Rs 765
Goldman Sachs has maintained a buy call on HDFC Life while hiking the target price to Rs 765 from Rs 730 as Q1FY25 was in line with the estimates.
The global brokerage firm stated that the ULIP products drove savings growth again while the non-par showed a positive beat.
Morgan Stanley: Overweight| Target price: Rs 790
Morgan Stanley has maintained an Overweight call on the company with a target price of Rs 790.
The global brokerage firm believes that the share price will rise relative to the country index over the next 45 days. Q1 results were solid while the stock has lagged the broader market. Morgan Stanley called HDFC Life one of the few quality stocks available at an attractive valuation.
Kotak Institutional Equities: Buy| Target price: Rs 805
Kotak Institutional Equities has retained a buy rating on HDFC Life with a target price of Rs 805.
“We expect surrender penalty guidelines to impact HDFC Life’s margins by about 1.5%, which the company may partially offset by a combination of better pricing (especially in interior India), change in payout structures (negotiation with distributors) and better product mix (increasing non-par savings and protection). Competitive intensity may remain benign,” said domestic brokerage firm Kotak Equities.
JM Financial: Buy| Target price: Rs 819
The domestic brokerage firm has maintained a buy rating on the stock with a target price of Rs 819.
JM Financial said that HDFC Life has faced multiple headwinds, coming in from taxation on higher ticket policies, bloated costs due to the Exide Life acquisition, and competition in the parent banca. With its evolved product suite and growth led by policy count, JM Financial expects the company to deliver consistent topline growth, with steady VNB margins.
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
Source: Stocks-Markets-Economic Times
