HDFC Life Insur. Q2 FY27 Results (NSE: HDFCLIFE)
Signal: Earnings grew
The read
The operating trajectory improved YoY, with total income up 18.5% to ₹2,408,036 lakh, net premium income up 15.7% to ₹2,172,737 lakh and PAT up 13.6% to ₹50,800 lakh, but the sequential comparison is weaker because investment income fell to ₹216,631 lakh from ₹1,665,306 lakh; the key thesis risk is persistency, with 13th-month premium-basis persistency down to 79.4% from 80.8% and 25th-month persistency down to 70.0% from 72.1%.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹24,080.36 Cr | +18.5% | -27.7% |
| Net profit | ₹508 Cr | +13.6% | |
| EPS | ₹2.34 | +12.5% | |
| EBIT margin | 0 |
P&L walk
Standalone total income rose 18.5% YoY to ₹2,408,036 lakh on higher net premium and investment income, while expenses of management rose 19.9% and PAT increased 13.6% to ₹50,800 lakh; sequentially, income and PAT declined as the prior quarter included substantially higher investment income.
Key positives
- Net premium income rose 15.7% YoY to ₹2,172,737 lakh, providing a stronger recurring operating base than the 18.5% total-income growth alone suggests.
- Underwriting surplus turned positive at ₹27,733 lakh versus a ₹17,221 lakh deficit YoY, while existing business surplus rose 16.0% to ₹175,267 lakh.
- PAT increased 13.6% YoY to ₹50,800 lakh and EPS rose 12.5% to ₹2.34, with the pat-to-eps cross-check remaining clean.
- Solvency improved to 180% from 175% YoY, and operating cash flow rose 59.5% YoY to ₹1,167,176 lakh.
Key concerns
- 13th-month persistency on a premium basis declined to 79.4% from 80.8% YoY, while 25th-month persistency fell to 70.0% from 72.1%, increasing the risk of weaker renewal economics.
- Expenses of management rose 19.9% YoY to ₹491,694 lakh, faster than net premium income growth of 15.7%.
- New business strain remained substantial at ₹156,903 lakh despite improving 16.9% YoY, continuing to absorb part of the existing-business surplus.
- Total income fell 27.7% sequentially to ₹2,408,036 lakh because investment income dropped to ₹216,631 lakh from ₹1,665,306 lakh in Q1FY27.
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