Motilal Oswal Backs HDFC Life: Buy Call Issued with ₹930 Target

INSURANCE
Whalesbook Logo
AuthorIshaan Verma|Published at:
Motilal Oswal Backs HDFC Life: Buy Call Issued with ₹930 Target
Overview

Motilal Oswal has issued a 'Buy' recommendation for HDFC Life Insurance, setting a target price of ₹930. The brokerage cited robust performance in the third quarter of FY26, with Annualised Premium Equivalent (APE) growing 11% year-on-year. While Value of New Business (VNB) margin saw a slight dip, analysts maintain their estimates, projecting continued growth based on the company's embedded value.

Motilal Oswal Reiterates BUY on HDFC Life Insurance

Motilal Oswal maintains its premium and Value of New Business (VNB) margin estimates for HDFC Life Insurance, reiterating a 'Buy' rating. The brokerage firm has revised its target price upwards to ₹930, basing its outlook on 2.3 times the estimated Embedded Value (EV) for FY28. This strategy underscores confidence in the insurer's long-term growth trajectory.

Strong 3QFY26 Performance Metrics

HDFC Life Insurance reported its third-quarter fiscal year 2026 results in line with expectations. The company posted an Annualised Premium Equivalent (APE) of INR 39.7 billion, marking an 11% year-on-year increase. This growth was propelled by a healthy 13% rise in individual APE and 2% in group APE. For the cumulative nine months of FY26 (9MFY26), APE reached approximately INR 100 billion, also showing an 11% year-on-year improvement.

VNB Margin and Profitability

The insurer's VNB grew 2.5% year-on-year to INR 9.5 billion in 3QFY26. The VNB margin stood at 24%, a decrease from 26.1% in the same period last year. For 9MFY26, VNB grew 7% year-on-year to INR 27.7 billion, with a VNB margin of 24.4%, compared to 25.1% in 9MFY25. HDFC Life Insurance recorded a shareholders' Profit After Tax (PAT) of INR 4.2 billion, a marginal 1% year-on-year increase, consistent with analyst estimates. Over 9MFY26, PAT grew 9% year-on-year to INR 14.1 billion.

Embedded Value and Outlook

The company's Embedded Value (EV) at the close of 9MFY26 was reported at INR 615.6 billion. The operating Return on EV (RoEV) was 15.6%. Motilal Oswal expects the company to maintain its performance and growth momentum, supporting the reiterated buy recommendation and the new target price.

Disclaimer:This content is for educational and informational purposes only and does not constitute investment, financial, or trading advice, nor a recommendation to buy or sell any securities. Readers should consult a SEBI-registered advisor before making investment decisions, as markets involve risk and past performance does not guarantee future results. The publisher and authors accept no liability for any losses. Some content may be AI-generated and may contain errors; accuracy and completeness are not guaranteed. Views expressed do not reflect the publication’s editorial stance.