Life insurer posts steady growth in value of new business and market share, but softer-than-expected premium volumes weigh on sentiment.
HDFC Life Insurance reported a 14% year-on-year rise in net profit to ₹546 crore for the June quarter of FY26, up from ₹478 crore in Q1 FY25. The company recorded Value of New Business (VNB) at ₹809 crore, reflecting a 12.7% YoY increase and a 15% 2-year CAGR, with new business margins improving to 25.1%, suggesting improved profitability per policy sold.
However, the Annual Premium Equivalent (APE) of ₹3,225 crore fell short of the ₹3,273 crore estimate, even as it grew 12% YoY. The retail APE stood at ₹2,777 crore. The individual APE growth came in at 12.5% YoY, while overall market share rose 70 bps to 12.1%, marking a new milestone for the insurer, according to CEO Vibha Padalkar.
Net profit: ₹546 crore (+14% YoY)
APE: ₹3,225 crore vs estimate ₹3,273 crore
VNB: ₹809 crore; VNB margin: 25.1%
Market share: Up to 12.1% (+70 bps YoY)
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Premium Income, Investment Yield Show Strength
Total gross premium income crossed ₹2,680 crore, including ₹1,487 crore from first-year premiums, ₹760 crore from renewal premiums, and ₹472 crore from single premiums. Net premium income rose to ₹1,446 crore.
A notable spike in policyholder investment income—from ₹1.8 crore in Q4 FY25 to ₹1,459 crore in Q1 FY26—boosted fund performance, especially in unit-linked products, which delivered 9.5% returns, reversing the -4.5% returns seen in the previous quarter.
Policyholder investment income: ₹1,459 crore (vs ₹1.8 crore QoQ)
Unit-linked fund yield: 9.5% (vs -4.5% in Q4)
Solvency ratio: 192% (vs regulatory 150% minimum)
Persistency Mixed, Distribution Costs Rise
While 13th month persistency ratio slipped to 82.7% from 87.3%, indicating some short-term pressure on policy retention, 25th and 49th month persistency ratios improved, signaling stronger mid- and long-term customer engagement.
Operating expenses increased to ₹150.9 crore, and net commissions paid rose to ₹174.9 crore, reflecting sustained investments in distribution. Benefits paid stood at ₹867.9 crore, and change in actuarial liability reached ₹1,701 crore—both indicators of a larger business base.
13th month persistency: 82.7% (vs 87.3% YoY)
Operating expenses: ₹150.9 crore
Net commissions: ₹174.9 crore
Benefits paid: ₹867.9 crore
Trading Reaction & Key Stock Levels
Despite healthy profit and margin metrics, HDFC Life shares closed 0.9% lower at ₹757.9 on the NSE, as the APE miss and declining near-term persistency ratio weighed on investor sentiment.
Watchlist:
HDFC Life (₹740–₹770 range) – Key support at ₹740; needs a close above ₹770 for trend reversal
SBI Life, ICICI Pru Life – Sector peers to watch for margin trend validation
Nifty Financial Services Index – Sentiment linked to insurance and BFSI earnings cycle
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