HDFC Life Q3 Preview: Double-Digit APE Growth Expected, But GST Loss to Hit Margins

• HDFC Life is projected to achieve double-digit growth in Annualised Premium Equivalent (APE) for Q3FY26, reaching Rs 3,930 crore, a 10 percent YoY increase.
• This APE growth is attributed to a favorable base from surrender charges and increased demand for protection products due to GST.
• Despite APE growth, profit is expected to be negatively impacted by losses from GST input tax credit on policies, leading to a 200 basis points contraction in VNB margins to 24 percent.
• Value of New Business (VNB) is likely to decline by 8 percent YoY to Rs 923 crore in Q3FY26.
• Investors will focus on the product mix and management commentary on non-par and protection products during the Q3 results announcement on January 15, 2025.

Why It Matters: HDFC Life anticipates strong APE growth in Q3, but GST input tax credit losses will likely squeeze profit margins.