HDFCLIFE - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 4.1

📊 Core Financials Breakdown

Profitability

ROE: 10.8% and ROCE: 6.53% — moderate returns, typical for insurance businesses with large reserves.

EPS: ₹8.69 — steady earnings base, with PAT growing 14.4% QoQ to ₹546 Cr.

Dividend Yield: 0.27% — minimal, indicating reinvestment focus over income distribution.

Balance Sheet & Leverage

Debt-to-Equity: 0.17 — low leverage, a positive for financial stability.

Book Value: ₹79.0 — implies a P/B ratio of ~9.9, high but common for insurance firms with strong brand equity.

💰 Valuation Metrics

Metric Value Comment

P/E Ratio 90.4 Significantly above industry average (73.5) — priced for premium growth

PEG Ratio 8.15 Very high — suggests growth is expensive or slowing

Intrinsic Value ~₹740–₹760 CMP is slightly above fair value zone

Valuation is stretched, especially with a high PEG ratio, but supported by consistent earnings and market leadership.

🛡️ Business Model & Competitive Edge

Sector: Life Insurance — individual and group policies, annuities, and pension products.

Strengths

One of India’s top private life insurers with strong brand recall and distribution via HDFC Bank.

Stable margins and consistent growth in Annualized Premium Equivalent (APE) and Value of New Business (VNB).

DII holding up (+0.47%) — positive domestic sentiment.

HSBC and Jefferies maintain bullish outlook with targets around ₹875–₹900

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Challenges

FII holding down (−0.21%) — cautious foreign stance.

GST reforms may impact short-term profitability due to repricing delays

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PEG ratio and high valuation multiples suggest limited near-term upside.

📉 Technicals & Entry Zone

Current Price: ₹785

DMA 50: ₹770 | DMA 200: ₹726 — bullish trend intact

RSI: 56.5 — neutral zone

MACD: Slightly positive — momentum stabilizing

📌 Suggested Entry Zone: ₹740–₹760

A dip near the 50 DMA or intrinsic value would offer a better margin of safety.

🧭 Long-Term Holding Guidance

Hold if invested: Strong fundamentals, brand strength, and low volatility (beta ~0.88) make HDFCLIFE a resilient long-term asset

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Accumulate on dips: Ideal for investors seeking exposure to India’s expanding insurance penetration and financial inclusion.

You can explore HDFC Life’s full financial dashboard and analyst ratings or track live updates and technical indicators for deeper insights. Let me know if you'd like a peer comparison with SBI Life or ICICI Prudential.

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stockanalysis.com

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Mint | MSN

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The Economic Times

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