Mirae Asset Sharekhan has issued a buy rating on HDFC Life Insurance with a target price of ₹715 based on strong premium growth and market expansion. According to the brokerage's analysis, the recommendation is supported by robust customer acquisition with policies growing in double digits and outpacing the industry. The rating comes amid broader institutional confidence in the HDFC financial ecosystem, with global heavyweights Morgan Stanley, Nomura, and Jefferies issuing targets of ₹730, ₹730, and ₹740 respectively, underscoring systemic institutional confidence in the company.
HDFC Life Insurance reported strong Q1FY27 performance with gross written premium rising 15% year-on-year to ₹17,168 crore, driven by robust 19% YoY growth in renewal premium collections to ₹9,020 crore. As reported by Mirae Asset Sharekhan, Total APE grew 9% YoY to ₹3,515 crore, with Individual APE growing 7% YoY to ₹2,969 crore. New business margin remained stable at 25%, slightly moderating from 25.1% YoY, though it improved 100 basis points quarter-on-quarter. If the residual GST impact of approximately 60 basis points is excluded, the underlying NBM actually expanded to 25.6%.
The company's product mix remained well-diversified with ULIPs constituting 44% of individual APE and non-PAR savings improving to 22%. According to Mirae Asset Sharekhan, the growth was underpinned by strong customer acquisition with the number of policies growing in double digits and outpacing the industry. Embedded value at the end of Q1FY27 was at ₹658.6 billion with operating RoEV at 14.7%. The company continues to outpace the industry in individual investor additions and systematic flows, with its rapidly expanding product bouquet spanning mutual funds, Exchange Traded Funds (ETFs), Portfolio Management Services (PMS), and specialized alternative investments insulating it against transient market volatility.
For FY27, management is prioritising top-line and VNB growth over margin expansion, intentionally keeping margins rangebound at about 25% by reinvesting gains back into the business. As reported by Mirae Asset Sharekhan, supported by deep penetration in Tier 2/3 markets and an expected volume recovery in the bancassurance channel, the long-term growth trajectory remains highly visible. The brokerage fine-tunes its estimates and values the stock at around 1.9x FY28 EV to arrive at the revised target price of ₹715, maintaining the buy rating. Despite the market's counterintuitive reaction to HDFC AMC's stellar financial performance, with shares plunging over 5% despite posting a 12% jump in Q1 net profit to ₹837.13 crore and AUM reaching ₹9.35 lakh crore, the underlying business fundamentals remain unequivocally strong, presenting a deeply discounted entry point for long-term capital allocators.
