HDFC Life shares decline 4% on Q4 results, Deepak Parekh’s resignation

Shares HDFC Life Insurance Company Ltd dropped 4% on Friday, April 19, after the private insurer’s earnings for the fiscal year ended March 2024 (FY24) disappointed investors.

HDFC Life announced on Thursday that the value of its new business (VNB) declined 5% to ₹3,501 crore in FY24 from ₹3,674 crore in FY23.

VNB is an indicator to measure profitability from the new policies issued during the year.

The insurer’s new business margins were also down to 26.3% in FY24 from 27.6% in FY23.

HDFC Life’s annual premium equivalent (APE), which is a common sales measure calculation used by life insurance companies, was also flat at ₹13,291 crore in FY24 compared with ₹13,336 crore in FY23.

However, profit after tax (PAT) for FY24 stood at ₹1,569 crore, implying an increase of 15% over FY23.

HDFC Life also announced that the company’s founder chairman and non-executive director Deepak Parekh would step down from his position with effect from close of business hours on April 18, 2024.

HDFC Life’s board has approved the appointment of Keki M Mistry as its new chairman. Mistry has been associated with the company since December 2000 and is currently a non-executive director on the board.

After the announcement, shares of HDFC Life declined over 4% in the opening session to hit an intra-day low of ₹581.1 apiece on the National Stock Exchange of India (NSE) on Friday. However, it soon trimmed losses to trade 1.3% lower at ₹597.65 apiece.

On Thursday, the board of directors of HDFC Life also proposed a final dividend of ₹2 per share for FY24.

HDFC Life is a long-term life insurance solutions provider in India, offering a range of individual and group insurance solutions. The company has more than 80 products and optional riders in its portfolio.