HDFC Life Q3 FY24 results: Net profit rises 16.6% to Rs 368 crore

Private sector life insurer HDFC Life Insurance Company posted a 16.3 per cent year-on-year (Y-o-Y) growth in net profit to Rs 367.54 crore for the quarter ended December 31, 2023 (Q3’ FY24), up from Rs 315.92 crore in the year-ago period. The improvement in profitability was supported by strong growth in investment income coupled with an uptick in premium income.

The investment income rose by 130.7 per cent Y-o-Y to Rs 11,372 crore, from Rs 4,929.8 crore a year ago.

Net premium income during the quarter rose by 6.05 per cent to Rs 15,273.25 crore from Rs 14,402.22 crore. The first-year premium during the quarter was slightly down by 1.6 per cent to Rs 2,680.5 crore as compared to Rs 2,724.9 crore.

For the nine months ended December 2023 (9M-FY24), net profit was up 15.5 per cent Y-o-Y to Rs 1,162.44 crore, from Rs 1,006.32 crore in 9M-FY23. First-year premium at Rs 7,097.9 crore was up 3.5 per cent Y-o-Y, while net premium income at Rs 41,578.34 crore grew by 11.1 per cent Y-o-Y, in 9M-FY24. Investment income surged by 172.6 per cent Y-o-Y to Rs 31,109.28 crore during the first nine months of FY24.

Commenting on the performance for the 9-month period of FY24, Vibha Padalkar, Managing Director & Chief Executive Officer of HDFC Life said, “Growth from Tier 2 and 3 markets remains strong, witnessing 14 per cent growth year on year. Our retail protection grew by 36 per cent based on individual annualised premium equivalent and credit protection clocked 21 per cent growth Y-o-Y.”

The total annualised premium equivalent of the insurer, however, dipped to Rs 3,191 crore in the quarter under review, from Rs 3,260 crore in the year-ago period on the back of a decline in higher ticket business.

“We are in the process of mitigating the impact of taxation announced during the budget last year. Business in up to Rs 5 lakh has grown by 17 per cent and the de-growth in the greater than Rs 5 lakh segment is upwards of 20-plus per cent,” said Niraj Shah, Executive Director & Chief Financial Officer of HDFC Life.

Meanwhile, the Value of New Business of the second-largest private life insurer dropped to Rs 856 crore in the October-December period of FY24 from Rs 875 crore a year ago. The Value of New Business margin was nearly flat at 26.83 per cent from 26.84 per cent in the year-ago period.

Going forward, the insurer expects Value of New Business to show double-digit growth and margins to be held at similar levels as compared to last year.

“We would aspire to grow at double-digit levels in this quarter (January-March 2024). And basically, the Value of New Business growth would mirror the annualised premium equivalent growth as it has because the margins will be held at the same levels. In case we find more opportunities for growth, we will focus on driving Value of New Business growth through that, even if we have to let go of some margins. So that is something that we are prepared to do, and we will be focused on Value of New Business growth,” Shah added.

Among other key metrics, the 13th-month persistency ratio of the insurer was down to 83.40 per cent as compared to 84 per cent in the September quarter of FY24. Whereas, the solvency ratio of the insurer was 190 per cent as compared to 194 per cent.