Top Indian Companies: HDFC Life Insurance Company Ltd.

HDFC Life Insurance Company Ltd. (HDFC Life) is a long-term life insurance provider with its headquarters in Mumbai, offering individual and group insurance services and incorporated on 14 August 2000.

The company is a joint venture between Housing Development Finance Corporation Ltd (HDFC), and Abrdn, a global investment company.

HDFC Life has 421 branches and is present in 980+ cities,villages and towns in India and supported by 16,544 employees. It is a Nifty 50 company with a weightage of 0.86% on the index.

Products and services

HDFC Life's products include Protection, Pension, Savings, Investment, Health along with Children and Women plans. The company also provides an option of customizing the plans, by adding optional benefits called riders, at an additional price.

The company currently has 37 retail and 11 group products, along with 6 optional rider benefits (as on 24 March 2020).

In 2022 - January it acquired Exide Life Insurance.

Shareholding Pattern

Holder's Name No of Shares % Share Holding

No Of Shares 2111813255 100%

Promoters 1009965325 47.82%

Foreign Institutions 616548441 29.2%

Banks Mutual Funds 86540964 4.1%

Others 120688312 5.71%

General Public 162246446 7.68%

Financial Institutions 36589828 1.73%

Foreign Promoter 78694105 3.73%

GDR 539834 0.03%

FY2023 Q4 and Full Year Results

HDFC Life on Wednesday said its profit remained almost flat at Rs 358.66 crore in the fourth quarter ended March 2023.

The profit was Rs 357.52 in the January-March quarter of the preceding fiscal, HDFC Life said in a regulatory filing.

The insurer earned a total income of Rs 21,426.40 crore in the quarter against Rs 16,054.94 crore in the same period a year ago.

The net premium income of the insurer increased to Rs 19,426.57 crore compared to Rs 14,289.66 crore.

The board has recommended a final dividend of Rs 1.90 per equity share of the face value of Rs 10 each for the financial year 2022-23, subject to the approval of the shareholders at the ensuing annual general meeting (AGM).

The embedded value stood at Rs 39,527 crore as on March 31, 2023, with an operating return on embedded value of 19.7 per cent for FY23.

Profit after tax for FY23 stood at Rs 1,360 crore, a robust year-on-year increase of 13 per cent.

This is despite the increased new business strain arising from higher growth in Q4, it said, adding the profit emergence continues to be aided by strong growth of 27 per cent in back book surplus.

During the year ended March 31, 2023, the company issued unsecured, subordinated, fully-paid, rated, listed, redeemable non-convertible debentures (NCDs) in the nature of as per the IRDAI (Other Forms of Capital) Regulations, 2015, amounting to Rs 350 crore at a coupon rate of 8.2 per cent per annum, it said.

The said NCDs were allotted on June 23, 2022, and are redeemable at the end of 10 years from the date of allotment with a call option to the company to redeem the NCDs post the completion of 5 years from the date of allotment and annually thereafter, it noted.

The company closed the year with strong growth of 27 per cent in individual weighted received premium (WRP) with a market share of 16.5 per cent and 10.8 per cent in the private and overall sectors, respectively, clocking expansion of 40 and 70 basis points, respectively, the company said in a statement.

"We continue to grow faster than the private industry and be ranked amongst the top 3 life insurers across individual and group businesses," it added.

In terms of individual WRP, it said, the company has outpaced the private industry over multiple timeframes, including in the past 3, 5 and 7 years, thereby consistently demonstrating growth leadership.

Brokerage Outlook

Brokerage, Nirmal Bank Institutional Equities, like the company for its product innovation and its philosophy of maintaining a balanced product mix. Nirmal Bang, maintain a positive stance on the stock and maintain BUY with a TP of Rs871 (4.5x 1HFY24E EVPS).

ESG and Sustainability

Our objective is to contribute towards building a sustainable future for our planet. Our initiatives to reduce our carbon footprint through consumption rationalisation, eco-friendly technology and efficient ways to reduce, reuse and recycle waste help us in this endeavour.

Our ESG strategy is driven by the vision that as a responsible life insurer we must take on the mantle to drive sharper, focused and impactful ESG programme that maximizes the value for all stakeholders and the community at large. The ESG strategy has been developed based on global benchmarks and material topics for HDFC Life, with an intent to address ESG risks and drive meaningful impact.

Our ESG approach is linked to our strategic goals. We have a management level committee, which overlooks the formulation of ESG framework and implementation of ESG strategy. A forum at executive committee-level also reviews the ESG related strategy and practices at frequent intervals.