Buy HDFC Life Insurance; target of Rs 850: ICICI Direct

ICICI Direct is bullish on HDFC Life Insurance has recommended buy rating on the stock with a target price of Rs 850 in its research report dated September 03, 2021.

“India’s specialty chemicals industry is a decadal growth opportunity and it is still not too late to participate in the value creation process. We prefer CRAMS/CSM players Navin Fluorine (Navin) and PI Industries (PI) as they provide long-term earnings visibility. We also like UPL due to robust growth outlook and reducing debt concerns and SRF due to rising contribution from the chemicals business,” JM Financial research report.

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ICICI Direct’s research report on HDFC Life Insurance

HDFC Life is among the most dominant players in the Indian life insurance industry with a healthy distribution network, 390 branches and additional customer touch points via partnerships and tie-ups, strong parentage and operating metrics. The company has a balanced product mix with focus on non-par and protection business and industry leading VNB margins of over 25%.

Outlook

Overall, we expect this merger to increase EVPS for FY23E by ~8% to Rs 183 per share. Thus, we revise our target price from Rs 800 to Rs 850 per share by valuing the company at ~4.4x FY23E EV. We maintain our BUY rating on the stock.

For all recommendations report, click here

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