Why did HDFC Life report fall in profits in the September quarter?

For the September quarter, the PAT of HDFC Life was down -15.84% yoy at Rs.276 crore and this was due to the higher provisions and higher claims paid out on account of COVID-2.0. However, top line revenues grew by 24.67% for the Sep-21 quarter on consolidated basis at Rs.20,478 crore. Revenues also improved sequentially by over 40%.

The new business premium for the quarter grew 22% at Rs.10,363 crore while renewal premium grew 18% at Rs.8924 crore. HDFC Life also reported 27% accretion in AUM or assets under management of its investment portfolio at Rs.191,212 crore. Value of new business or VNB was sharply up by 30% yoy basis in the first half of fiscal at Rs.1,086 crore.

HDFC Life still tops the private insurance segment in terms of new business premium with market share of a whopping 22.3%. Operating expenses ratio was however higher on a yoy basis. Net margins at 1.35% was lower than 2% margins on yoy basis. The margins were also lower on a sequential comparison due to the pressure of higher claims and provisions.