{"id":199,"date":"2019-08-30T11:42:35","date_gmt":"2019-08-30T11:42:35","guid":{"rendered":"http:\/\/www.assetmultiplier.co.in\/blog\/?p=199"},"modified":"2019-08-30T11:42:37","modified_gmt":"2019-08-30T11:42:37","slug":"hdfc-life-robust-fy20-strategy-to-drive-growth","status":"publish","type":"post","link":"https:\/\/www.assetmultiplier.co.in\/blog\/2019\/08\/30\/hdfc-life-robust-fy20-strategy-to-drive-growth\/","title":{"rendered":"HDFC Life \u2013 Robust FY20 strategy to drive growth"},"content":{"rendered":"\n<p>Dated: 29th August 2019<br><strong>Market update:<\/strong><br><br>With no big catalyst today, the markets continued to fall for third straight day as Nifty dropped -0.9% to 10,948. Today was also the monthly F&amp;O (Futures and Options) expiry day which led to volatile trading session. It is important to note that the FIIs have continued to sell their positions in spite of rollback of additional surcharge. This highlights that the focus is on the economy and corporate earnings growth. <\/p>\n\n\n\n<p>Among the sectoral indices, Pharma was an outlier with the index rising 2.3%. 7 out of 11 major indices were in the red zone with Financial services (-1.9%) and Banks (-1.8%) led the drop. Within the stocks, Sun pharma (+5.2%) bharti infratel (+3.5%), JSW steel (+3.0%) were the best performers while SBI (-3.7%), Yes bank (-3.5%) and HDFC (-2.68%) were the worst performers. <br><br><\/p>\n\n\n\n<p><strong>HDFC Life \u2013 Robust FY20 strategy to drive growth<\/strong><br> <br> <\/p>\n\n\n\n<p><strong><span style=\"text-decoration: underline;\">Key highlights from interview with Mrs. VIbha Padalkar (CEO- HDFC Life) that appeared in Economic Times \u2013 29<\/span><sup><span style=\"text-decoration: underline;\">th<\/span><\/sup><span style=\"text-decoration: underline;\"> August 2019<\/span><\/strong><\/p>\n\n\n\n<ul><li>The market realises a couple of things. One is\nthat insurance companies have a much longer horizon in terms of everything and\nfundamentals of Indian macros are pretty strong and worldwide it is seen as\nvery strong emerging market. <\/li><li>The understanding of what insurance products can\noffer which are different from investment related insurance products as it was\nknown earlier, is becoming more and more apparent.<\/li><li>Protection is something that insurance companies\nare beginning to focus on and HFDC Life has been the market leaders in that\nspace.<\/li><li>They expect the industry to grow from strength\nto strength despite all the macro level volatility that they are seeing.<\/li><li>HDFC Life has always believed in the principles\nof strong growth and profitability. Market share is an outcome. It will\ncontinue to beat overall industry growth but not necessarily be the first in\nterms of profitability as well as market share.<\/li><li>1Q margins were very robust, just shy of 30% and\nthis was on the back of a lot of focus on&nbsp;\nnon-par product which is Sanchay Plus. However, on a full year basis,\nthis will stabilize somewhat. It will certainly be higher than where it ended\nlast year but nevertheless rationalise.<\/li><li>She believes in a balanced product mix. HDFC\nlife might be exiting the year with a non-par portfolio in the range of about\n35 odd per cent.<\/li><li>HDFC Life continues to be interested in\nevaluating inorganic growth opportunities that come its way. They have a\ncurrency and a strong balance sheet but they want to do this in a sensible\nmanner. As regards Max Life, nothing is on the table right now but they\ncontinue to remain interested.<\/li><\/ul>\n\n\n\n<p><strong>Strategy for FY20:<\/strong><\/p>\n\n\n\n<ol><li>In Q1, agency channel grew 121%, bancassurance\ngrew upwards of 45%, broker channel grew three times, online channel almost\ndoubled. In FY20, they want to continue to forge ahead through all its\nchannels. They want to be firing on all the channels.<\/li><li>They want to continue to be known as product\ninnovator and they have a few in the pipeline and they are hoping that by the\nend of 3Q, they can take some more blockbuster products to market which will be\nfirst of its kind.<\/li><li>They are known as a technology-focussed life\ninsurer. On that part as well, they have mentioned in the past that they have\ntied up with Ivy Camp and they are looking under their Futurance umbrella at a\nwhole host of start-ups that can work with them.<\/li><li>Be it in the pension space or the life insurance\nspace, they are looking at it as an end-to-end platform.<\/li><li>Forging ahead in the ecosystem such as the\nrecent tie up with Airtel. They are having more conversations that are\nhappening with the new ecosystem partners who at present have a very huge\ncustomer base who have not really thought that they could sell financial\nservices products through their own channels.<\/li><\/ol>\n\n\n\n<p><strong>Consensus estimates (Marketscreener website):<\/strong><\/p>\n\n\n\n<ul><li>The stock price was Rs 541\/- as of close price of 29<sup>th<\/sup>\nAugust 2019 and trades at P\/E multiple of 72x \/ 62x \/ 56x the consensus EPS of\nRs 7.5\/ 8.8 \/9.6 for FY20E \/21E \/ 22E respectively.&nbsp;<\/li><li>Consensus target price is Rs 529\/- implying P\/E of\n55x for FY22E EPS of Rs 9.6.<\/li><\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Dated: 29th August 2019Market update: With no big catalyst today, the markets continued to fall for third straight day as Nifty dropped -0.9% to 10,948. Today was also the monthly F&amp;O (Futures and Options) expiry day which led to volatile trading session. It is important to note that the FIIs have continued to sell their [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/posts\/199"}],"collection":[{"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/comments?post=199"}],"version-history":[{"count":1,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/posts\/199\/revisions"}],"predecessor-version":[{"id":200,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/posts\/199\/revisions\/200"}],"wp:attachment":[{"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/media?parent=199"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/categories?post=199"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/tags?post=199"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}