HDFC Life Insurance Company (HDFCLIFE IN) – Q4FY26 Result Update – Growth falls short; FY27 to see recovery – BUY
Published on 17 Apr 2026
Q4FY26 APE was flat YoY on account of softness in banca volumes and subdued growth in NPAR. While sustained momentum in retail protection post GST rationalization continues to be positive, near-term demand is likely to be impacted due to global uncertainties. We build an APE growth of 11%/ 13% for FY27/ FY28E. Q4/ FY26 VNB margin contracted to 24.0%/ 24.2% due to higher fixed costs (~90 bps) and a drag from GST exemption (~110 bps). We build a gradual expansion in VNB margin to 24.7% /25.2% in FY27/28E (back to FY25 levels) as the share of protection/ annuity increases and the impact of GST neutralizes. The stock has corrected significantly due to under-performance on growth; we expect a recovery in margin and growth outlook in FY27/ FY28E. We roll-forward to FY28E with a slight change in multiple of 2.2x (vs. 2.4x earlier). We value HDFCLIFE using the appraisal value framework with a TP of INR 835. Retain BUY.
