This HDFC stock to give 24% return despite Q2 loss — Here’s why brokerages are bullish

HDFC Life Share Price: HDFC Life Insurance Company Ltd reported a 3.27 per cent rise in its September quarter net profit to Rs 447 crore, compared with Rs 433 crore in the same period last year. 

However, the stock slipped 1.7 per cent to Rs 749.55 on Wednesday as investors digested the results.

HDFC Life Q2 Update

The preceding June quarter had seen a profit of Rs 546 crore, indicating some sequential pressure.

The insurer’s first-year premium (FYP) grew to Rs 3,579 crore from Rs 3,253 crore in Q2 FY25, while single-premium income rose to Rs 5,370 crore from Rs 4,843 crore. 

Despite growth in premiums, investment income fell sharply to Rs 1,410 crore from Rs 11,610 crore, reflecting weaker market conditions.

Why Brokerages Are Bullish?

Brokerages, however, remain largely positive on HDFC Life, citing strong margins and long-term growth potential. The average upside on HDFC Life based on brokerage targets is approximately 24%.

Jefferies maintained a buy rating and raised its target price to Rs 930 from Rs 910, noting that Q2 VNB (Value of New Business) of Rs 10,000 crore, up 8 per cent YoY, slightly exceeded estimates, with better margins. 

They expect growth to improve from the December quarter as the base normalises and competitive pricing in non-par savings products stabilises.

Citi also maintained a buy rating, raising its target to Rs 1,000 from Rs 975, while CLSA kept an accumulate rating and increased its target to Rs 910 from Rs 890. 

Read More: HDFC Life Q2FY26 Results: PAT rises 3%, net premium income up 13%

CLSA highlighted that HDFC Life’s 1HFY26 VNB margin of 24.5 per cent was slightly above expectations, despite a 50 bps drag due to GST input tax credit loss. 

Retail protection growth was robust at 28 per cent in H1 FY26, with over 50 per cent growth in September following the GST changes.

Goldman Sachs (GS) maintained a buy rating with a target of Rs 865, noting that VNB was up 8 per cent YoY, driven by strong growth in par products and ULIPs, which grew 42 per cent YoY. 

GS also pointed out that VNB margins remained stable at around 24 per cent, supported by a better product mix and higher sum assured ULIPs.

HDFC Life Market Share

The company’s market share rose to 11.9 per cent overall and 16.6 per cent among private insurers, reflecting steady business momentum. 

The solvency ratio stood at 175 per cent, despite a combination of dividend payouts, repayment of Rs 600 crore of subordinated debt, increased protection business, and the impact of GST. 

HDFC Life also plans to raise to Rs 750 crore in subordinated debt in the second half of FY26.