Shares of HDFC Life Insurance Company Ltd increased nearly 2 percent on Thursday, becoming the top gainer on the Nifty 50 index, following the release of its fiscal first quarter results that surpassed market expectations. The stock rose as much as 2.2 percent to Rs 580 in early trading, after closing at Rs 567.20 on Wednesday, a rise of 2.16 percent ahead of the earnings announcement. However, the stock remains down 24.4 percent so far in 2026.
Earnings Performance
For the April-June quarter, HDFC Life reported a value of new business (VNB) of Rs 879 crore, an increase of 8.5 percent year-on-year, exceeding the CNBC-TV18 poll estimate of Rs 842 crore. The VNB margin held steady at 25 percent, above the market expectation of 24.3 percent, indicating a continued focus on profitability despite recent changes in the tax regime. Annualised Premium Equivalent (APE) rose 8.8 percent year-on-year to Rs 3,515 crore, while retail APE increased 6.9 percent to Rs 2,969 crore. New business premium grew 12 percent to Rs 8,143 crore, aligning with expectations. Profit after tax also increased by 12 percent to Rs 611 crore, and assets under management surpassed Rs 4 lakh crore during the quarter.
Analyst Upgrades
Following the results, brokerage Nomura upgraded HDFC Life to 'Buy' and raised its target price to Rs 730, suggesting a potential upside of about 29 percent from Wednesday's closing price. Nomura noted that the company achieved a VNB margin beat of approximately 100 basis points. Chief Financial Officer Niraj Shah indicated that the VNB margin would have been 25.6 percent, compared to 25.1 percent a year earlier, after excluding GST impacts. Underlying profit growth, excluding GST effects, was reported at 17 percent for the quarter.
The positive earnings report and subsequent upgrade by Nomura are likely to support HDFC Life's stock price, potentially influencing investor sentiment in the insurance sector. Investors will watch for further developments in the company's product offerings and market strategy as it navigates the changing regulatory landscape.