HDFC Standard Life hits new high; stock zooms 89% against issue price

HDFC Standard Life Insurance Company hit a new high of Rs 547, up 5% on the BSE in intra-day trade on Monday, in otherwise subdued market.

Since April 18, post January-March quarter (Q4FY18) results, the stock of insurance company outperformed the market by surging 11% against 3.3% rise in the S&P BSE Sensex. The stock zoomed 89% against its issue price of Rs 290 per share.

With the market-cap of Rs 1.08 trillion at 02:37 pm; HDFC Standard Life stood at number 27th position in overall market-cap ranking, the BSE data shows. The company surpassed Vedanta, Bajaj Finance and Mahindra & Mahindra in market-cap ranking today.

HDFC Standard Life is growing better in group credit life which is a highly profitable product segment, analysts at Prabhudas Lilladher said in Indian Life Insurance sector update.

New Business (NB) annual premium equivalent (APE) growth slowed down for the life insurance industry at 16% year-on-year (YoY) in FY18 (Vs 21% YoY FY17) as group business APE grew merely 1% YoY (Vs 21% YoY in FY17). Individual business APE continued to grow better at 19% YoY (21% YoY in FY17) as key private players such as SBI Life and HDFC SL clocked over 30% YoY growth.

The brokerage firm believe new business annual premium equivalent (APE) growth to remain more or less at these level for FY19E as ULIPs which was driving the growth is likely to see lower growth this year) due to low demand as markets have turned more volatile and certain key players are not likely to be aggressive to grow in this segment as they look to maintain balanced product mix. Growth will be led mainly by protection products both individual and group; however ticket sizes are quite low for the individual segment.

Average premium per policy continues to increase for private players as we believe many players have been growing strong in high ticket size ULIPs, while LIC’s ticket size has been more or less at similar levels for the last couple of years. Average ticket size for private players is at Rs 53,700 up 13.5 % YoY whereas LIC’s average ticket size is at Rs 17,700 up 5% YoY. Private’s share has increased in total policy volumes from 22% in FY15 to 24.3% in FY18, it added.

At 03:00 pm; the stock was trading 3% higher at Rs 537 on the BSE, as compared to 0.02% rise in the S&P BSE Sensex. The trading volumes on the counter nearly doubled with a combined 2.65 million shares changed hands on the BSE and NSE so far.