Time period given by analyst is one year when HDFC Life Insurance Company Ltd. price can reach defined target.
HDFC Life Insurance Company Ltd., incorporated in the year 2000, is a Large Cap company (having a market cap of Rs 148505.98 Crore) operating in Financial Services sector.
HDFC Life Insurance Company Ltd. key Products/Revenue Segments include Amount transferred from Policyholder Account, Interest, Dividend & Rent and Profit/Loss on Sale/Redemption of Investments for the year ending 31-Mar-2021.
Financials
For the quarter ended 30-06-2021, the company reported a Consolidated Total Income of Rs 395.46 Crore, down -32.38 % from last quarter Total Income of Rs 584.85 Crore and down -12.61 % from last year same quarter Total Income of Rs 452.50 Crore. Company reported net profit after tax of Rs 269.55 Crore in latest quarter.
Investment Rationale
The brokerage believe with the acquisition of Exide Life, expansion in terms of geography (tier II and III regions), customers and distribution (agency channel) remains positive. Preoverrun margin similar to HDFC Life is positive, though focus will be on improving cost matrix and persistency. Given low market share, flattish business and low persistency, cost of acquisition at Rs 6687 crore i.e. ~2.5x EV is not cheap. Overall, the brokerage expects this merger to increase EVPS for FY23E by ~8% to | 183 per share. Thus, it revises target price from Rs 800 to Rs 850 per share by valuing the company at ~4.4x FY23E EV. It maintains BUY rating on the stock.
Promoter/FII Holdings
Promoters held 58.9 per cent stake in the company as of March 31, 2021, while FIIs held 25.7 per cent, DIIs 6.3 per cent and public & others 9.2 per cent.
(Disclaimer: Views and recommendations given in this section are the analysts’ own and do not represent those of ETMarkets.com. Please consult your financial adviser before taking any position in the stock/s mentioned.
