InvestorQ : I had bought some shares of HDFC Life after the IPO but sold out in a short while. After the latest results, can I buy more shares of HDFC Life at current prices?
ishika Banerjee made post

I had bought some shares of HDFC Life after the IPO but sold out in a short while. After the latest results, can I buy more shares of HDFC Life at current prices?

Answer
image
Archita Jajjoo answered.
2 years ago
Follow

HDFC Life fourth quarter results

The company reported a modest 5% growth in net profits to Rs.364 crore in the March quarter. The total income increased sharply by 77% to Rs.14,375 crore in the fourth quarter showing good traction on the business growth front. The one positive feature of the results was that HDFC Life’s Embedded Value (EV) increased by 20% to Rs.18,301 crore. The EV is like the present value concept and represents a summation of net worth and the present value of all future summation of profits to shareholders. This is a key input in valuation of insurance companies along with the value of new business (VNB).

Should HDFC Life be bought at current prices?

The stock price of HDFC Life has corrected sharply in the last 1 year and is now quoting at Rs.399, down nearly 30% from its peak price. One can look at HDFC Life as a very solid play on the fast growing but largely underpenetrated life insurance market in India. Its pedigree as part of the HDFC group and a focus on profits are likely to help the stock create good value in the coming quarters. One can go long on the stock from a perspective of 2-3 years as a good play on insurance growth. Avoid taking a short term trading bet on the stock.

2 Views