Post Q4, HDFC Life sank by 2% in Tuesday’s trade. The Company noted a loss of 14.3% on Monday in its net profit of Rs. 311.71 crore for the March quarter due to fall in investment income.
Last year, the company managed to bag home a profit of Rs. 364.01 crore. The investment income fell to negative Rs 10,229.92 crore in the quarter as against an income of Rs 3,755.6 crore in the year-ago period.
Provisions for diminution in value of investments rose to ₹375.85 crore in Q4 compared to ₹17.32 crore in the year-ago period. The result was declared after market hours on Monday.
Brokerages note that operational performance has been week. According to Kotak Institutional Equities, covid-19 dented HDFC Life’s Q4FY20 performance with lower value of new business (VNB) and large investment variance.
“The company may be well placed on portfolio margins, but forecasting volume growth and optimising business investments (expense management) remain crucial for FY2021. Its product leadership will likely help it resume growth trajectory in FY2022E, supporting rich valuations,” said the brokerage firm.