India's HDFC Life profit rises marginally as tax cuts drive demand amid high costs

HDFC Life Insurance

15/01/2026 12:34

Jan 15 (Reuters) - India's HDFC Life Insurance HDFL.NS reported a marginal rise in third-quarter profit on Thursday, as a higher premium collection driven by tax cuts more than made up for an increase in expenses.

The insurer's net profit rose 1.4% to 4.21 billion rupees ($46.62 million) for the three months ended December 31, up from 4.15 billion rupees a year earlier.

Demand for insurance products grew in the third quarter, supported by the government's move to slash goods and services tax (GST) on life insurance products to zero from 18%.

HDFC Life's net premium income grew 8.8% to 182.42 billion rupees. However, its management expenses rose 30% to 45.33 billion rupees driven by higher employee-related costs and operating expenses.

    Annualised premium equivalent sales from individual policies, a key metric that calculates the annualised total value of single and recurring premium policies, rose nearly 13% to 35.17 billion rupees during the quarter, according to Reuters' calculation.

The number of policies sold recorded double-digit growth during the quarter, HDFC Life said.

"We expect this momentum to sustain into Q4, supporting a balanced and healthy full-year outcome," Chief Executive and Managing Director Vibha Padalkar said in a statement.

However, the government's move to do away with GST for insurance products also hurt insurers' margins as they could no longer claim the input tax credit.

HDFC Life's value of new business (VNB), or expected profit from new policies, increased 2.7% to 9.55 billion rupees for the reported quarter, per Reuters' calculation.

Without the GST cut and a regulation change regarding surrender charges, VNB growth for the quarter would have been 11%, the company said.

Its margins from new business for the nine months ended December 31 contracted to 24.4% from 25.1% a year earlier.

($1 = 90.2960 Indian rupees)

 (Reporting by Hritam Mukherjee and Nishit Navin in Bengaluru)

 ((Hritam.Mukherjee@thomsonreuters.com; X: @MukherjeeHritam;))