HDFC Life Q3FY26 Preview: Double-digit APE growth expected; GST impact to weigh on margins

HDFC Life Insurance Q2FY26 Result Preview: HDFC Life Insurance is expected to report a steady performance for the December quarter (Q3FY26), supported by healthy growth in premiums and new business, according to estimates by the Zee Business Research team. However, margins are likely to remain under pressure during the quarter.

As per Zee Business Research estimates, the insurer’s standalone gross premium income is projected to rise to Rs 19,950 crore in Q3FY26, compared with Rs 17,275 crore in the year-ago period, reflecting a 15.5 per cent year-on-year growth. Growth is expected to be driven by geographical expansion, higher customer additions and steady performance across distribution channels.

Net profit after tax (PAT) for the quarter is estimated at Rs 440 crore, up from Rs 415 crore in Q3FY25, translating into a 5.5 per cent increase, the estimates show.

Add Zee Business as a Preferred Source

Double-digit APE growth likely

The insurer’s Annualised Premium Equivalent (APE) is expected to grow in double digits. New business APE is estimated at Rs 4,040 crore, compared with Rs 3,570 crore a year ago, implying a 13.2 per cent year-on-year rise, according to Zee Business Research. The growth is expected to be supported by expansion into newer geographies and stronger new customer acquisition, which could aid market share gains.

VNB margin seen moderating

Despite strong business growth, the Value of New Business (VNB) margin is expected to moderate to around 24 per cent, from 26.1 per cent in the corresponding quarter last year. According to Zee Business Research Team, the decline will largely be due to the impact of GST input credit, which is expected to weigh on margins.

Product mix and channel performance

Premium collections are expected to get support from a higher focus on group insurance policies, even though these typically come with lower margins. The bancassurance channel is expected to remain a key contributor to growth during the quarter.

Demand for non-participating insurance plans is expected to rise due to lower premium requirements. Such plans do not offer dividends or bonuses to policyholders which makes them more predictable from an insurer’s perspective.

Diversion towards non-linked products

Interest in non-linked products is seen to be rising, with a recovery also visible in credit term plans. Notably, Zee Business Research highlights that HDFC Life has one of the lowest dependencies on linked products in the industry, which provides greater earnings stability.

Overall, HDFC Life’s Q3FY26 performance is expected to reflect healthy business momentum, even as near-term margin pressures remain in focus, according to Zee Business Research.